Malaysia’s wait to have a balanced budget could extend by 3 years

5 Jan 18

The Malaysian government’s aim to have a balanced budget by 2020 may be delayed by two to three years, it has said.

The second finance minister Johari Abdul Ghani said the country was unlikely to meet its target for 2020 as it struggles to meet its objectives.

He said at a conference on Thursday: “I don’t think by 2020 [the government] can achieve a balanced budget because if you do that, basically you will squeeze the economic development.

“We will try to extend it to 2022-23.”

Since prime minister Najib Razak came to power in 2009, he has been able to lower the country’s fiscal deficit every year and maintain its investment-grade sovereign credit ratings.

But ratings agencies warned late last year that the government would struggle to meet its objective within the timeframe due to a run up in spending.

The prime minister, who is also finance minister, announced in October a $66bn spending plan for the final budget before elections take place.

The plan included benefits for civil servants and increased medical and education-related benefits. 

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