KUALA LUMPUR (Reuters) - Malaysia’s government announced an expansionary budget on Friday aimed at spurring domestic activity as the country grapples with the fallout of the COVID-19 pandemic, setting aside concerns of a growing fiscal deficit for the time being.
People dine in at a restaurant in front of Petronas Twin Towers, in Kuala Lumpur, Malaysia November 5, 2020.
Picture taken November 5, 2020.
REUTERS/Lim Huey TengHere are some highlights from the planned budget, including data from the fiscal and economic outlook reports released by the government ahead of the budget speech:2021 BUDGET* Expenditure to rise to 322.5 billion ringgit ($77.94 billion) in 2021 from 314.7 billion ringgit in 2020* Revenue to total 236.9 billion ringgit vs 227.3 billion ringgit in 2020* Operating expenditure seen at 236.5 billion ringgit* Development expenditure seen at 69 billion ringgit* COVID-19 fund allocation seen at 17 billion ringgit vs this year’s 38 billion ringgit* Dividend from state oil firm Petronas [PETR.UL] at 18 billion ringgit, down from this year’s 34 billion ringgitFISCAL TARGETS* Fiscal deficit to fall to 5.4% in 2021 from 6% in 2020 - the highest since 2009 global financial crisis* Current account surplus seen falling to 20.3 billion in 2021 from this year’s 48.5 billion ringgit due to an expansion of domestic industrial and investment activities* Forecasts fiscal deficit to average 4.5% between 2021 and 2023, assuming the economy grows at a pace of 4.5%-5.5% over the period and crude oil prices trades at $45-$55 per barrelECONOMY* Economy seen growing 6.5%-7.5% in 2021, after shrinking 4.5% this year* Gross exports to grow 2.7% after falling 5.2% in 2020* Inflation expected to normalise at 2.5% in 2021* Unemployment rate to drop to 3.5% in 2021 from 4.2% this year* Domestic demand seen rebounding 6.9% in 2021, after an expected fall of 3% this year due to lower private and public sector spending($1 = 4.1380 ringgit)
Lim Huey Teng
Reuters, Petronas Twin Towers, REUTERS, Petronas
KUALA LUMPUR, Kuala Lumpur, Malaysia