Fiscal deficit at 6% to GDP

The Federal Government's revenue collection in 2022 is estimated to be higher at RM234bil or 14.3% to gross domestic product (GDP).

In the Fiscal Outlook 2022, it says the higher revenue will be driven by the anticipated increase in tax revenue collection to RM171.4bil and non-tax revenue to RM62.6bil.Similarly, total expenditure is budgeted to be slightly higher at RM332.1bil or 20.3% to GDP, attributed to higher operating expenditure (OE) at RM233.5bil and development expenditure (DE) at RM75.6bil.

The remaining RM23bil is for disbursements under the Covid-19 fund.

The increase in OE is mainly due to supplies and services, debt service charges as well as emoluments.
DE allocation will be mainly directed towards the implementation of programmes and projects under the 12th Malaysia Plan, among others include the electrified double track rail Gemas - Johor Bahru, Rapid Transit System Link and Pan Borneo Highway.
With a higher ceiling for the Covid-19 Fund, the government will allocate RM23bil for the stimulus and economic recovery measures.

The Government says the allocation will support programmes and projects such as wage subsidy and cash assistance programmes as well as small- scale projects.

As stipulated under the Temporary Measures for Government Financing (Coronavirus Disease 2019 (Covid-19)) Act 2020 [Act 830], the fund will continue to remain in operation until end-2022.

After considering revenue growth and expenditure requirements, the fiscal deficit is expected to moderate to 6% to GDP.

Similarly, excluding the debt service charges, the primary deficit is estimated at 3.3% to GDP.

The government is committed to providing adequate fiscal support to revitalise the domestic economy back to its growth potential.

Hence, the resumption of fiscal consolidation will be on a more gradual trajectory, guided by the medium-term fiscal framework.

Meanwhile, the 2022 to 2024 Medium-Term Fiscal Framework has been revised with a more gradual fiscal consolidation on the assumption of nominal GDP growth averaging 7.7%, average crude oil prices at US$67 per barrel as well as average crude oil production of 580,000 barrels per day.

Total revenue in the medium term is projected at RM736bil or 13.9% to GDP, contributed mainly from non-petroleum revenue estimated at RM600.7bil or 11.3% to GDP. Petroleum related revenue is forecast at RM135.3bil or 2.6% to GDP.

The total indicative expenditure ceiling for the 2022 to 2024 period, including the Covid-19 Fund, is estimated at RM999.9bil or 18.9% to GDP.

The OE allocation is projected at RM726.9bil or 13.7% to GDP, while DE at RM250bil or 4.7% to GDP.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights


Next In Business News

CPO futures likely to undergo technical correction next week
Econpile issues termination notice to Gabungan Strategik
Intel's US$20bil Ohio factory could become world's largest chip plant
Shrunken US oil inventories point to chronic under-supply
Royal Dutch no more - Shell officially changes name
Oil price slides, but climbs for 5th week on supply concerns
GLOBAL MARKETS-Bond yields tumble as Netflix fuels stock market sell-off
Rising interest rate fallout unlikely
Policy normalisation can lend support to ringgit
Short Position - Green bond, O&G funding, Going the EV way

Others Also Read