KUALA LUMPUR: Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar clarified today that next week’s recalibration of the Budget 2016 would not be an austerity measure.
“With lower expected oil revenue, we have to optimise our spending by focusing on projects with high economic impact,” he said during his keynote speech at Standard Chartered Bank Malaysia Bhd’s Global Research Briefing 2016 on Tuesday.
The government is expected to announce the Budget 2016 revision this Jan 28 as oil slipped below US$29 per barrel, which was 40% lower than US$48 per barrel assumed by the government during budget announcement last year.
“We cannot simply use the term 'austerity measures', but what we are looking for is to optimise or stretch our spending. We are not cutting spending simply for the sake of cutting spending,” Abdul Wahid said.
He said only 14% of the government’s revenue for 2016 is from oil-related revenue compared to 19.3% in 2015.
“The government would continue to work on its fiscal consolidation measures to diversify government’s revenue,” he said.
Abdul Wahid said the government would also be announcing the country’s targeted gross domestic product (GDP) growth for 2016 next week.
The government has earlier targeted Malaysia’s economy to grow between 4%-5% for 2016.“Overall, Malaysia’s is in a better position to ride through the global uncertainties,” he said, adding that the ringgit is currently trading below its fundamentals.