Wider fiscal deficit due to stimulus package, Moody's says

Moody’s said the one-off, temporary nature of the stimulus, with only one-tenth of the package involving direct spending by the government, limits the scope for substantial and sustained fiscal slippage while providing some support for domestic demand.

KUALA LUMPUR: While the series of economic stimulus package announced by the government will support domestic demand and economic growth, the package also leaves the government with a wider fiscal deficit at least for 2020, says Moody’s Investors Service.

Moody’s said that the package would also increase the government’s fiscal consolidation challenge over the next few years, particularly given a debt burden that is already higher than similarly rated peers.