Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Jan 8): Prime Minister Datuk Seri Najib Razak will announce a revision of Budget 2016 to accommodate Malaysia's falling revenue from lower oil prices and uncertainties in the global economy.

The national budget tabled in October last year should be more "realistic" and in line with the current economic situation, the prime minister told Finance Ministry staff at an assembly this morning in Putrajaya.

Budget 2016 was tabled when oil was US$48 per barrel. The price has now fallen to below US$33 per barrel.

"I propose to table a restructured budget for 2016 that we will recalibrate from several aspects so that it is more realistic and in line with the economic situation.

"I will also outline additional measures that we need to take and new emphases for us to face this situation. We will ensure that our main objective is to prioritise the people," Najib, also the finance minister, said.

The economy grew in the first nine months of 2015, with gross domestic product (GDP) growing by 5.1%.

However, Najib predicted more challenging times ahead for 2016 due to China's erratic economic growth that would indirectly impact the country.

He said China, the second largest economy in the world, is also Malaysia's biggest trading partner.

The US Federal Reserves' interest methods and strengthening of the dollar are also bound to affect the country's economic situation, said Najib.

"To manage the challenges in 2016, firm and more responsive action is required not only by the Finance Ministry but the entire government, government-linked companies (GLC) and the people as a whole.

"We have to manage our resources efficiently and optimise them.

"We have to be ready to think of the best method to ensure our economy is sustainable," he said.

Najib estimated the economy would continue to be stable with growth of between 4% and 5%, and inflation rates remaining low at between 2% and 3%.

"The government is committed to reduce fiscal deficit to 3.1% of the GDP in 2016 and the federal debt is expected to remain under control, limited to 55% of the GDP," he said.

      Print
      Text Size
      Share