KUALA LUMPUR: A private sector think-tank expects 2019 to be a year of certainty in terms of execution and implementation as the government seeks to put in place the Budget 2019 proposals.
Socio-Economic Research Centre (SERC) executive director Lee Heng Guie said on Thursday some macroeconomic reforms had already taken place and there may be a need to fine tune it.
Lee said 2019 is the year to implement quickly whatever was promised in the budget to minimise inefficiency and ensure that spending is fully disbursed so that there will be no delay in activity.
“If there is a bigger slowdown, the government should think if it has the fiscal space or some money to readjust and to carry out some quick project to create activity, and to make sure the confidence is there,” he said at a .press conference here on the quarterly economy tracker for October to December last year and the 2019 outlook.
“If you look at the focus this year or next year, it’s very much about fiscal reforms because of the debt, liability and the need to convince investors, particularly rating agencies or any investors that the government is determined to repair to further strengthen the government’s financial position.
“A clean, healthy balance sheet is needed to support the economy in terms of selective types of fiscal spending, give incentive and if the private sector sees the reforms undertaken by the government, they will have more confidence on future growth,” he added.
Lee stressed that the priority is to provide policy certainty, clarity and consistency to set a stable environment.
He added that external factors are beyond control but the government has to anticipate what the challenges are which could impact the economy, such as the trade war tension between United States and China, unstable global oil prices and volatility in the financial markets.
In Lee’s presentation earlier, he said the Malaysian economy is expected to grow at a 4.7% in 2019 in light of the slower global economy.
He said exports will be challenged by slower global demand for electrical and electronics products, weaker commodity and crude oil prices and technical base effect of high exports value averaging RM83.3bil per month in 2018.
He added domestic demand will remain the dominant driver of economic growth with a spending of 72.3% of the GDP from the private sector and 20% of the GDP from the public sector.