RHB expects spending on social assistance to remain significant

RHB expects spending on social assistance to remain significant
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KUALA LUMPUR (Oct 19): RHB Investment Bank Bhd said Budget 2021 will be expansionary, albeit at a lower magnitude.

In a Budget 2021 preview today, RHB projected an improvement in the fiscal deficit to 5% of gross domestic product (GDP) in 2021 from 6.5% in 2020, in line with the need for fiscal consolidation.

RHB said the government has indicated that it is looking to expand the tax base, with all possible avenues being considered.

“However, given the weak economic momentum, especially early this year, it is likely that any such measures would be implemented later.

“Spending on social assistance is expected to remain significant.

“Cash handouts and targeted support to the tourism sector and small and medium enterprises (SMEs) may continue at least until 1H21 (the first half of 2021),” it said.

“Similarly, targeted support to segments that continue to suffer, such as tourism and SMEs, may continue. As a result, we believe consumer stocks will continue to be beneficiaries,” it said.