KUALA LUMPUR (Oct 14): Malaysia’s fiscal deficit projection of 3.2 per cent of gross domestic product (GDP) for 2020 is broadly in line with expectations, given the difficult external environment and various constraints against boosting revenues, S&P Global Ratings (S&P) said today.
“We’ll continue to closely observe fiscal consolidation progress in Malaysia, especially in the context of the containment and reduction of government debt ratios, and following relatively higher deficits in 2018 and 2019,” said S&P analyst Andrew Wood in a statement today.
In July, S&P affirmed Malaysia’s issuer credit rating at A- with a stable outlook, while Fitch Ratings also confirmed Malaysia’s sovereign credit ratings at A- with a stable outlook.
The government is on track to achieve the target deficit of 3.4% of GDP this year.
In the 2020 Budget tabled on Friday (Oct 11), the fiscal target was revised to 3.2% of GDP in 2020 from 3.0% previously, but it remained on track to average at 2.8% of GDP in the medium term.
Finance Minister, Lim Guan Eng earlier today reiterated that the government is on the right course to put the country back on its fiscal track and restore the economy as espoused in its three-year financial roadmap, despite entrenched uncertainties brought about by the United States-China trade war which has reoriented the global supply chain. — Bernama