HOW OUR ECONOMY WILL FARE IN 2020
HOW THE GOVT INTEND TO SPEND IN 2020
HOW THE GOVT FILL THE NATION'S COFFER
Lower public revenue in 2020 in absence of Petronas special dividend.
The federal government's revenue is expected to drop to RM244.53 billion in 2020, down 7.1% from RM263.3 billion in 2019. However, the amount will still be higher than RM232.88 billion collected in 2018.
Government expects RM26.8 billion SST collection in 2019.
The sale tax and service tax (SST), which was originally forecast at RM22 billion in the 2019 Budget, was revised upwards to RM26.8 billion due to better-than-expected collection in the first half of 2019
For sales tax, the collection is targeted at RM15.5 billion following higher demand for four wheel drive (4WD) and sports utility vehicles (SUV) as well as machines and spare parts.
Malaysia Automotive Association (MAA) statistics show that 4WD and SUV vehicles sales for the first half of 2019 leaped 77.4% year-on-year.
Government's tax revenue up 3.4% to RM180 billion in 2019
Tax revenue is expected to go up 3.4% to RM180 billion with the share of direct tax and indirect tax constituting 75.4% and 24.6% respectively.
HAS THE COUNTRY'S DEBT SITUATION IMPROVED?
Govt debt rises to RM799.1 billion to fund deficit
The federal government's debt stood at RM799.1 million, or 52.7% of GDP, compared with RM741.05 billion in 2018. The increase in national debt is due mainly to finance the budget deficit, which aims to stimulate economic growth.
Debt service charges climb to RM34.9 billion in 2019
The country's debt charges are expected to increase to RM34.94 billion in 2020 from RM33 billion in 2019. The charges were at RM30.54 billion in 2018.
Debt charges will be the third largest component of the government's Opex in 2020 accounting for 14.5%, the biggest being civil servant emolument (RM82.6 billion), followed by supplies and services (RM38.54 billion), according to the 2020 Fiscal Outlook and Federal Government Revenue Estimates report issued by the Ministry of Finance.
In 2019, debt service charges make up 12.5% of the government's revenue, contributed by interest payment for domestic loans and offshore borrowings.
A big bulk of govt debt is in local hands
Resident holders of the federal government debt remained well spread with holdings of RM609.1 billion, accounting for 76.2% of the total.
A diversified investor base supports an active secondary market for government securities, thus keeping funding costs low and stable.
Average time to maturity of national debt increases to 8.1 years
The average time to maturity, indicating the upcoming refinancing needs, is expected to increase from 7.6 years in 2018 to 8.1 years in 2019 after taking into account issuances for the year.
Hence, the maturity profile is more favourable with an increase in the share of outstanding debt papers of above 10 years, from 21.4% in 2018 to 25.9% as at end-June 2019.
PERFORMANCE OF EACH ECONOMIC SECTORS
The sector expansion will be backed by stable gas production derived from stronger domestic demands from the petrochemical industry and rising exports of liquefied natural gas (LNG), particularly to China, Japan, and South Korea.