PM expects ringgit to regain strength

At 9 am(0100gmt), the ringgit was traded at 4.2940/2970 against the greenback from 4.2950/2990 on Wednesday.

KUALA LUMPUR: Datuk Seri Najib Tun Razak expects the ringgit to regain its strength and an appropriate market rate as the economy continues to perform well, which has been predicted by all forecasters.

In his economic vision statement issued on Tuesday, ahead of the unveiling of the Budget 2018 proposals on Friday, the Prime Minister said while it is true that the Ringgit weakened amidst the global turmoil and uncertainties since 2014, "but there have been positive aspects to that, as our exports and tourism boomed".

Najib, who is also the Finance Minister, said while some have painted it as weak, the Ringgit actually performed better than the currencies of many other large commodity exporter countries.

"As our economy continues to perform well – as all forecasters predict it will – our Ringgit will regain its strength and an appropriate market rate," he said.

He also pointed out Malaysia has been successful in reducing its reliance on revenue from oil and gas, which contributed 41% of government income in 2009. Now O&G supplies only 14.6% of government revenues in 2017.

As for the Goods and Service Tax (GST), he said it should not be considered an additional new tax but part of a comprehensive tax reform that is designed to make Malaysia more competitive, to control the black and illegal economy, to reduce tax evasion and broaden the overall tax base.

Since Malaysia implemented our GST in 2015, many other countries, such as India and Egypt, have followed suit, while all the Gulf Cooperation Countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates – will implement their GST on Jan1 next year.

"And our economic plan has led to Malaysia's GST rate only needing to be 6% – far lower than other countries who don't share our strong economic fundamentals," he added.

He also refuted the claim that GST was necessary to pay for 1MDB, describing it "an absolute lie – as the politicians making this false claim know very well."

"Now it is true that 1MDB has had its share of problems, and we long ago revamped the management to correct the mistakes and bring it back to financial health.

"But when the Bandar Malaysia project agreement is signed, you can expect 1MDB to make a decent profit that will more than recover its losses.

"And the lie that the people have had to pay for 1MDB's decisions will be nailed once and for all, as after the rationalisation programme is completed it is very likely that 1MDB will have made a profit for the people – not to mention all the corporate social responsibility work it has done over the years," he said.