Rating agencies confident Malaysia can reach fiscal targets

Finance Minister Lim Guan Eng: Improved tax collection strategies and continued economic growth will ensure that Malaysia readily meets its fiscal consolidation objectives.

KUALA LUMPUR: The international rating agencies are confident Malaysia will meet its fiscal targets, particularly the 3.4% fiscal deficit to GDP ratio this year,  the Finance Ministy said in a statement.

It issued the statement on Tuesday following Finance Minister Lim Guan Eng's recent  visit to the US where he had engaged with international rating agencies S&P,  Fitch and Moody’s to provide an update on Malaysia’s current economic and financial developments. 

“The international rating agencies were convinced that Malaysia will achieve our fiscal targets, particularly the 3.4% fiscal deficit to GDP ratio this year, and were comfortable with Malaysia’s economic performance to date,”  the MoF said.

Lim had led a Malaysian delegation to the International Monetary Fund (IMF) and World Bank Group (WBG) Spring Meetings (Meetings) held from April 11 to 13 in Washington D.C. 

This year’s meetings focused on current issues affecting the global economy, international financial system and progress of the global development agenda, including eradicating extreme poverty, dealing with climate change, promoting shared prosperity and inclusivity. 

He represented the 11-member Southeast Asia Voting Group (SEAVG), comprising Brunei , Fiji, Indonesia, Laos, Malaysia, Myanmar, Nepal, Singapore, Thailand, Tonga and Vietnam.

The meeting was to emphasise that WBG to not just uplift the living standards of poor countries but also the need to set up a model of how middle income member countries can avoid slipping back into low-income status, or escape the middle-income trap to be a high-income economy like Singapore, South Korea or Chile. 
 
During his visit, Lim was also invited to deliver the keynote address at a WBG event in Washington where the theme was “Unlocking the Potential of the Digital Economy”. 

He shared his views in the Malaysian context and aspirations of using technology and the digital economy, especially embracing 5G fully, to launch Malaysia into a high-income status nation, the statement said. 

He also outlined the risks of digital disruption causing loss of jobs in traditional sectors, where many of these jobs would not be replaced by new jobs. 

Lim stated Malaysia does not accept creative destruction, and there was a need to create new jobs through income incentives or supplements to replace jobs necessarily lost through digital disruption.