KUALA LUMPUR: RAM Ratings Services Bhd has projected Malaysia’s fiscal deficit in 2019 to narrow to 3.3% of the gross domestic product (GDP) from an estimated 3.6% in 2018, amid still-resilient domestic demand growth, the implementation of various fiscal measures and ongoing institutional reforms.
It said the government’s medium-term fiscal framework, which targets an average budgetary shortfall of 3.1% of the GDP throughout 2019-2021, is considered achievable, highlighting the government’s commitment to fiscal consolidation.
In a statement, the ratings agency said fiscal revenue, excluding Petronas’ special dividend, is expected to only edge up by 1.4% to RM236.9bil (15.5% of GDP) in 2019, a pale comparison to the 3.8% growth in 2017.
“This highlights the role of oil and gas-related revenue which is expected to account for 30.8% of total revenue (inclusive of dividends) next year as a significant stop-gap revenue source while new fiscal measures are implemented. — Bernama