KUALA LUMPUR (Aug 15): Local business firms and investors are now worried about the implication of various macroeconomic issues such as the escalating US-China trade tensions, which could take a toll on the economy and further cloud business sentiment, according to PwC Malaysia executive chairman Datuk Mohammad Faiz Azmi.
"I guess there is nothing specific with regards to the local market that the investors are worried too much about [now], but everyone is concerned with what the big [economies] are doing," Mohammad Faiz told reporters on the sideline of the four-day International Malaysia Law Conference 2018 here today.
At the same time, Mohamad Faiz said the collapse of the Turkish lira and the sanctions and trade spat among big economic giants will further add to the current uncertain and volatile environment, "which is not good for business".
"Being a little country with an open economy, Malaysia will obviously be [part of the] collateral damage," he added.
Earlier, Mohamad Faiz was asked to comment on the latest audit progress into troubled 1Malaysia Development Bhd (1MDB), which has been the subject of criminal investigations in multiple jurisdictions, including Switzerland, Singapore, United States and Malaysia.
"Ah, no. I can't comment. That one, you can refer to the Attorney-General's Chambers," he added.
On June 26, Finance Ministry appointed Treasury's deputy secretary-general Datuk Asri Hamidon as the new 1MDB chairman, and Mohammad Faiz as chairman of the executive committee which is tasked with recovering 1MDB's assets and managing the strategic development company's debt.
On Malaysia's fiscal position, Mohamad Faiz said the strong outlook of the crude oil price will give the country a bit of headroom as the government seeks to improve tax revenue, which is expected to come in lower as a result of having abolished the unpopular goods and services tax (GST) and replacing it with the sales and services tax (SST).
"One thing I would say is that Malaysia remains dependent on oil, in terms of tax in generating the revenue," he said. "If you look at the projection for the oil price, it is predicted to go up. That will give us (Malaysia) a bit of headroom," he added.
Amid a resilient crude oil price outlook, Mohamad Faiz said the government must decide on various other measures to plug the imbalance in tax revenue, as the SST collection is expected to be RM21 billion in 2018, in contrast with the previous annual GST collection of RM43 billion.
"Let's look at Budget 2019, when the government presents it later in November. Then, we can have a much more lively discussion," he added.