This, he said, was due to among others, the escalating US-China trade war, which have pulled down the growth of the world economy, particularly with Malaysia being an export-oriented country.
“We have to accept the fact that government spending will not be huge (for economic development) and we are looking at a 4.5 per cent growth in the gross domestic product,” he told reporters on the sidelines of the CIMB Asean Research Institute (CARI) and Asean Business Club’s briefing on progress, priorities and challenges of the ASEAN Economic Community (AEC) here today.
However, he said what the country should also do is to think about the fiscal responsibility to be carried out in terms of managing the deficit.
Munir, who is also the Chairman of CARI, said the government needed to manage its finances, while discovering that what was previously recorded as the country’s deficit may not be the real deficit number.
“For example, if you overstate your revenue, obviously your deficit will be lower...and for the private sector, if this scenario happens, we would have an adjustment period whereby you need to make an adjustment to your account.
“I had my own experience when I was in Celcom when we have to make adjustments because certain assets were recognised in the previous year which didn’t exist (there are some fake invoices) so we had to restate the account.
“So in this case, in respect of our own fiscal position, I think we have situation where we have over recognised revenue and likely if the government spends too much, our fiscal deficit is going to look so much worse than what it was last year and year before,” he said.
He added that Malaysia has sources of revenue from the previous Goods and Services Tax, for example, but it was not being compensated fully by the reintroduction of the Sales and Service Tax.
“But we are lucky because the price of crude oil has been going up. However, Sabah and Sarawak wants 20 per cent of the royalty...I think that has got to wait,” he said.
Asked if the AEC could achieve its target of becoming a single market with trade volume expected to double come 2025 amid the ongoing global threat, Munir said, “things change all the time”.
“It could slow down the process but with the digital economy coming up so fast, definitely it could speed up the process...with the forces of technological integration.”
On the resignation of CIMB Group Holdings Bhd’s Chairman Datuk Seri Nazir Razak, Munir said he wished him the very best.
“One must respect his decision, one must recognise his contributions and one must wish him all the very best.
“I have known Datuk Seri Nazir for 29 years. I was the Chief Executive Officer who engaged him in 1989 and then I had to leave to establish the Securities Commission,” Munir said.
Yesterday, CIMB announced that Nazir, brother of former Malaysian Prime Minister Datuk Seri Najib Tun Razak, would step down from his post and all other positions within the group by Dec 31, 2018.
He has been CIMB’s Chairman since 2014, prior to which he was the Chief Executive for 15 years. - Bernama