KUALA LUMPUR (April 19): Malaysia’s current account balance will remain in surplus for 2019 and the economy is not experiencing a current account deficit, says political secretary to the Finance Minister Tony Pua.
Pua today issued a statement in response to a Bloomberg interview hosted by David Ingles with the invited guest, UBS Global Wealth Management regional chief investment officer Kelvin Tay on April 11.
“Tay argued that Malaysia had a current account deficit. This is quite scary as Malaysia has always prided itself as an economy with a current account surplus, with our value of exports well-exceeding imports being one of the country’s key strengths.
“For example, in 2018, Malaysia registered a current account surplus of 2.3 per cent of gross domestic product (GDP). Given Malaysia’s very healthy trade surplus so far, the country’s current account balance will remain in surplus for 2019,” Pua said.
He said Malaysia does, however, have a moderate fiscal deficit, which is typical of developing countries, whereby for 2018, the deficit was 3.7 per cent of GDP and is projected to fall to 3.4 per cent this year.
Finance Minister Lim Guan Eng has also projected that Malaysia’s fiscal deficit would further decline to three per cent for 2020 and less than 2.8 per cent for 2021.
Commenting on Tay’s claims that oil revenue made up 30 per cent of Malaysia’s GDP, Pua said this is incorrect and Malaysia is well-recognised by the investment community as having a fairly diversified economy.
In giving example, Pua highlighted that Malaysia’s mining (including the oil and gas sector), manufacturing and services sectors made up 7.9 per cent, 23 per cent and 55.5 per cent of the GDP in 2018, respectively.