Malaysia needs a fiscal buffer to face any contingency — World Bank

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PUTRAJAYA (Sept 12): There is a need for Malaysia to create a fiscal buffer to address any contingency, said World Bank Group (WBG) Representative to Malaysia and Country Manager Dr Firas Raad.

"Our general advice to the government at the moment is to think about building their fiscal buffer and make sure there is enough fiscal space to address any contingency that may emerge,” he told the media after the launch of WBG Report on Monitoring Occupational Shortages: Lesson From Malaysia's Critical Occupational List (COL) by Human Resources Minister M. Kula Segaran here today.

Raad said the government was seeking to boost economic growth without eroding fiscal discipline and faces challenges in balancing both.

Meanwhile, he said World Bank expects Malaysia to stick to its previous forecast fiscal deficit target of 3.0% of the gross domestic product next year when it announces the federal budget in October.

On the annual report, Raad said Malaysia's COL was an innovative platform for keeping abreast of changing labour market demands associated with new technologies, automation, and Industry 4.0.

“Many countries in Southeast Asia, including Malaysia, face imbalances between labour demand and supply but fail to effectively deploy students and job seekers in a way that addresses these imbalances,” he said.