Friday 29 Mar 2024
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KUALA LUMPUR (June 16): CIMB IB Research said Malaysia’s path of fiscal consolidation remains on track, with the 2018 budget deficit likely to be in the ballpark of this year’s target of -3.0% of gross domestic product.

In an economic update June 15, the research house said that policy priorities in Budget 2018 may pay more attention to longer-term structural issues than in past years, in a prelude to the TN50 plan next year.

It said prudent fiscal and monetary management remain key in mitigating external volatility, particularly risks associated with fiscal governance and external payments position.

In the report following the 2018 Budget Consultation at Putrajaya chaired by Prime Minister Datuk Seri Najib Razak, the research house said it was heartened by the government’s commitment to fiscal consolidation, in particular by the Prime Minister’s comments that the government intends to resist the temptation to increase spending beyond fiscal targets ahead of the general elections, which are due by August 24, 2018.

"Coming on the heels of June 14’s guidance that the Federal Reserve intends to continue US monetary policy normalisation, we believe that prudent fiscal management and vigilant monetary policymaking are key defences in mitigating external volatility, as investors and ratings agencies continue to closely monitor risks associated with fiscal governance and the external payments position,” it said.

  

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