KUALA LUMPUR (June 9): The Malaysian government foresees slower global economic growth to impact the local economy, but stressed it remains committed to its fiscal consolidation effort and is confident that Malaysia will still achieve its targeted 4%-4.5% growth this year.

In a statement today, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the government will continue to optimise its expenditure and rearrange its development projects according to their importance.

His statement came a day after the World Bank cut its global growth forecast for the year to 2.4%, from 2.9%.

“The International Monetary Fund has projected that the world economy will grow slower at a rate of 3.2% from 3.4%, and this is going to impact domestic economy,” he said.

“Nevertheless, the government is committed to continue its steps in fiscal consolidation and government fiscal deficit is expected to decrease to 3.1% of gross domestic product (GDP) in 2016,” he added.

Ahmad Husni said ministries and agencies are required to be prudent in managing the recruitment of civil servants — with no new unit or institution to be established; as well as managing their expenditure by reprioritising programmes and projects according to their level of importance.

He also stressed that the appointment of a third party consultant is prohibited, except for high technological projects which require specialised knowledge.

Ahmad Husni added there will be a limit on official visits and the number of officials allowed to go overseas. The use of government premises for receptions will also be prioritised, while administration costs like printing and supply be reduced.

Meanwhile, he said the government will continue to execute high-impact development projects such as the Mass Rapid Transit, Light Rail Transit, and Pan Borneo Expressway, which have potential to bring multiplier effects to the economy.

“The government will closely monitor domestic economic development and execute initiatives that boost the export sector, tourism, and increase investment and private consumption,” Ahmad Husni said.

These initiatives, he added, includes reduction in non-tariff barriers among Asean countries; aggressively increasing access to markets like India, the Middle East, and Eastern Europe; and the broadening of market opportunity in halal industry, Islamic finance, healthcare services, tourism and agricultural products.

Ahmad Husni also said the government will prepare the Blueprint for the development of Digital Economy that comprises guidelines and regulations for entrepreneurs and investors.

On top of that, he said Malaysia will extend e-visa facility to other countries like Russia and India, while also promoting specific tourism products like eco-tourism, health tourism, and heritage sites locally.

At the same time, it will continue to encourage foreign investments via parterships among MIDA, MITI, Invest KL and ambassadorial offices overseas, while boosting private consumption by increasing disposable income.

With these steps, Ahmad Husni said the government is confident in achieving its projected domestic economy growth of between 4% to 4.5% this year.

“The government is committed to continue its fiscal consolidation effort on the federal government’s 2016 financial position, amidst facing uncertain near-term global economy challenges,” he added.