{"id":4261,"date":"2020-06-14T11:39:22","date_gmt":"2020-06-14T03:39:22","guid":{"rendered":"https:\/\/newmalaysiatimes.com\/?p=4261"},"modified":"2020-06-15T12:45:03","modified_gmt":"2020-06-15T04:45:03","slug":"government-spending-necessary-though-nearly-doubles-fiscal-deficit","status":"publish","type":"post","link":"https:\/\/newmalaysiatimes.com\/?p=4261","title":{"rendered":"Government spending necessary though nearly doubles fiscal deficit"},"content":{"rendered":"
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KUALA LUMPUR, June 14 \u00a0— The government expenditure for this year will likely cause the fiscal deficit to widen to almost double that recorded in\u00a02019, but this\u00a0is deemed necessary because the current economic indicators point\u00a0towards a possible recession by year-end, said an economist.<\/p>\n

Putra Business School senior lecturer and manager for business development, Prof Dr. Ahmed Razman Abdul Latiff, said some of the indicators such as unemployment rate and gross domestic product (GDP) growth were not encouraging and could even worsen, thus requiring\u00a0immediate intervention by the government.<\/p>\n<\/div>\n

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\u00a0“The introduction of PRIHATIN economic stimulus package and the National Economic Recovery Plan (PENJANA) is\u00a0testimony to the\u00a0government\u2019s full commitment to address this economic slowdown in order to mitigate the negative impacts on the\u00a0people and businesses.<\/p>\n

\"percent\"<\/p>\n

\u201cThe government is committed to spending billions of ringgit\u00a0under the PRIHATIN and PENJANA packages. The next step is to secure sources of funding by obtaining borrowings, which will increase the fiscal deficit. That is the reality, as limited options for\u00a0funding are available particularly amid\u00a0COVID-19,\u201d he told Bernama.<\/p>\n

On the advantages of raising debt through domestic borrowings, Ahmed Razman said there would be protection against\u00a0fluctuations in\u00a0foreign currency exchange rates.<\/p>\n<\/div>\n

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As an example, he cited\u00a0the Malaysian government\u2019s issuance of\u00a0Samurai bonds worth 200 billion yen (then RM7.4 billion) with a coupon rate of 0.63 percent per annum early last year.<\/p>\n

\u201cAlthough the interest rate is low, we will end up paying more and more every year if the yen appreciates drastically against the ringgit in\u00a0the next few years. With domestic borrowings, there would\u00a0be no such risk,\u201d he said.<\/p>\n

On the government\u2019s aim to narrow the fiscal deficit to less than 4.0 percent of the GDP over the next three years, Ahmed Razman said it was achievable given that Malaysia had recorded\u00a0fiscal deficits of less than 4.0 percent for the past six years.<\/p>\n<\/div>\n

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\u201cWhen the fiscal deficit was 6.7 percent in 2009, we managed to reduce it to less than 4.0 percent in 2013. I am confident that with a projected fiscal deficit of 6.0 percent for this year, we can reduce it to less than 4.0 percent by 2023, provided there is no major economic crisis affecting the Asian region or the world for the next few years,\u201d he said.<\/p>\n

Ahmed Razman\u00a0said a couple of months ago, the International Monetary Fund mentioned that Malaysia had\u00a0a capacity to borrow up to 70 percent of the GDP.<\/p>\n

\u201cSeveral ASEAN countries have higher percentages than Malaysia such as Singapore (126 percent), Vietnam (57.5 percent), Laos (53.34 percent). If we look at the Asian countries, Japan has the highest percentage (238 percent),\u201d he noted.<\/p>\n

— BERNAMA<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

KUALA LUMPUR, June 14 \u00a0— The government expenditure for this year will likely cause the…<\/p>\n","protected":false},"author":1,"featured_media":4262,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17,524],"tags":[],"class_list":["post-4261","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","category-nation"],"featured_image_urls":{"full":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8.jpg",977,585,false],"thumbnail":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8-150x150.jpg",150,150,true],"medium":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8-300x180.jpg",300,180,true],"medium_large":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8-768x460.jpg",640,383,true],"large":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8.jpg",640,383,false],"1536x1536":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8.jpg",977,585,false],"2048x2048":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8.jpg",977,585,false],"newsium-slider-full":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8.jpg",977,585,false],"newsium-featured":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8.jpg",977,585,false],"newsium-medium":["https:\/\/newmalaysiatimes.com\/wp-content\/uploads\/2020\/06\/670f9f8c474cc82b20b2ea9b12ce7d575ee587eed5bb8.jpg",720,431,false]},"author_info":{"info":["Editor"]},"category_info":"Economy<\/a> Nation<\/a>","tag_info":"Nation","comment_count":"0","_links":{"self":[{"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=\/wp\/v2\/posts\/4261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4261"}],"version-history":[{"count":2,"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=\/wp\/v2\/posts\/4261\/revisions"}],"predecessor-version":[{"id":4264,"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=\/wp\/v2\/posts\/4261\/revisions\/4264"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=\/wp\/v2\/media\/4262"}],"wp:attachment":[{"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newmalaysiatimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}