KUALA LUMPUR (Nov 2): While the projected fiscal deficit for 2018 is expected to come in higher at 3.7% of gross domestic product (GDP), versus the previously targeted 2.8%, AMMB Holdings Bhd (Ambank) does not expect this to result in a credit ratings downgrade by key international rating agencies.

"Even in 2009 with a fiscal deficit of 6.7%, Malaysia was not impacted by a downgrade due to the nation's resilience and broad-based economic structure. Indeed, this budget is laudable as there is no hint of opaqueness," said Ambank's group chief executive officer Datuk Sulaiman Mohd Tahir.

He also noted that the new budget reflects the government's commitment to stronger governance and transparency.

"This transparency provides clear visibility on the full extent of the government's fiscal deficit. With this drive towards instilling fiscal discipline and financial prudence coupled with Malaysia's solid fundamentals, we expect a recovery in the coming year.

"In fact, today in Southeast Asia, despite global headwinds, Malaysia is the least impacted from a macroeconomic perspective. As the honourable Finance Minister YB Tuan Lim Guan Eng highlighted, the ringgit is one of the best performing currencies in the emerging markets. As such, this holistic budget is indeed timely to stabilise the nation's economy and support positive growth," said Sulaiman.

He also said the banking group is honoured to have been appointed by the government as one of the participating banks to provide concessionary financing for the RM1 billion affordable housing fund for the lower income groups.

In tabling the budget earlier, Lim said the supply of affordable homes will fail to meet pent-up demand for housing without the necessary availability and accessibility of loans from financial institutions.

"To assist the lower income group earning not more than RM2,300 per month to own a house for the first time, a fund amounting to RM1 billion will be established by Bank Negara Malaysia, to help them to purchase affordable homes priced up to RM150,000.

"The fund will be made available from Jan 1, 2019 at participating financial institutions, namely AmBank, CIMB, Maybank, RHB and BSN through a concessionary financing rate as low as only 3.5% per annum. This will significantly reduce the monthly financing instalment of borrowers to own a house, and make it easier to qualify for the required financing. The RM1 billion fund is available for two years or until the allocation is exhausted," he explained.