THE Malaysian Government is striving to reduce its budget deficit and achieve a balanced budget. This sounds good. A balanced budget would ensure a strong public sector financial position, more confidence in the economy, a stable currency and a stable economy.
It is expected that the Government will reduce its deficit from 4.5% of gross domestic product (GDP) in 2004 to 3.8% in 2005. This process will involve a reduction of Government gross development expenditure by about 9% in 2005.