Insight - Effective implementation is the key for the budget

Swift action: Medical personnel collect samples for Covid-19 testing in Subang Jaya. Budget 2021 has allocated RM17bil for the Covid-19 Fund as containing the pandemic is crucial to reduce the budget deficit.

THE uneven state of economic recovery from the pandemic-inflicted slump gets a strong fiscal booster from Budget 2021.

The occurrence of a second worldwide wave of virus and a third wave on our shores is expected to temper the pace and strength of the anticipated firmer domestic economic recovery in the fourth quarter of 2020 and in 2021. It is critically dependent on the future virus path and the availability of vaccines.

It is a balancing act as fiscal stimulus support is incredibly important to support the revitalisation phase of the economy while keeping the deficit and debt manageable. Given the unwarranted risks and challenges ahead, the Finance Minister has budgeted a targeted expansionary fiscal stimulus of RM322.5bil – or 20.6% of gross domestic product (GDP) – in 2021, an increase of 2.5% from RM314.7bil (21.9% of GDP in 2020). This includes RM17bil in the Covid-19 Fund (RM38bil in 2020).