KUALA LUMPUR (June 3): The Malaysian government’s expenditure is expected to increase significantly this year due to unanticipated subsidies for fuel, chicken and eggs, cooking oil as well as flood relief, according to the Ministry of Finance's (MoF) pre-budget statement.
“Assuming the current global commodity prices level remains and the government maintains current subsidised prices, there will be potentially a RM30 billion increase in subsidies expenditure,” the ministry said.
In terms of expenditure in the first four months this year, the government said it has spent RM116.9 billion or 35.2% of the total expenditure allocated for 2022, including the Covid-19 Fund.
Among these expenditures, MoF said RM87.5 billion or 37.5% of initial allocation had been spent for operating expenditure as at April, including spending for education subsector and subsidies, especially for fuel.
The ministry said RM23.2 billion of development expenditure or 30.7% of initial allocation in Budget 2022 was channelled to the economic sector over the first four months of this year.
Expenditures from the Covid-19 Fund amounted to RM6.2 billion as at April, which is equivalent to 27% of initial allocation. The largest share was attributable to the social sector which encompassed payment for Bantuan Keluarga Malaysia.
In the National Budget 2022, the government had allocated RM332.1 billion of expenditure, of which RM233.5 billion are for operating expenditure, RM75.6 billion for development expenditure and RM23 billion for Covid-19 Fund.
In the public expenditure strategy, MoF said emphasis will be given to supporting fiscal reforms to rebuild the government’s fiscal space in the post-pandemic period.
The ministry added that given the expected persistent high global commodity and food prices, the key priority will be to undertake a more targeted approach to subsidies, especially for the vulnerable.
“The transition from recovery to reform initiatives is a key focus for the 2023 national budget in comparison with Budget 2022,” said MoF.
“Furthermore, the government will continue to optimise expenditure as well as reduce wastages and leakages in ensuring value for money spent,” it added.