Budget 2023: Encourage more exports, FDI to boost ringgit's attractiveness, says economist

KUALA LUMPUR: Budget 2023, which is expected to be tabled later today, is being awaited with great anticipation by Malaysians from all walks of life as it will chart the nation’s vision in the coming year.

The rising cost of living, ringgit valuation, food security, job security and foreign direct investment (FDI) are among the key topics that are expected to be addressed as the country is now exiting the pandemic era.

Putra Business School Associate Prof Ahmed Razman Abdul Latiff said to boost confidence in the ringgit, the government also needs to encourage more foreign direct investment into the country and reduce reliance on imported products, especially on agro-food.

"The government needs to encourage more exports not just of products but services as well, by taking advantage of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) to make the ringgit attractive,” he said.

He added that the ringgit can be further strengthened if Budget 2023 can introduce initiatives to reduce the country’s reliance on imported products, increasing domestic produce, and encouraging exports especially by taking advantage of the recent ratification of CPTPP and RCEP free trade agreements.

"I'm hoping for a budget that is responsive to the current needs of the people, businesses, and industries, while maintaining focus towards sustainability and a resilient nation,” he said.

He emphasised that Budget 2023 needs to be expansive but, at the same time, able to generate a new source of income to ensure that the nation will not fall deeper in debt.

Ahmed Razman also opined that the ringgit’s performance would still be heavily affected by the economic situation in the United States (US), especially with the strong demand for the US dollar, rather than the budget presented today.

He said the budget should ensure the current focus of keeping the inflation rate low is maintained.

He cautioned that another round of unchecked fiscal stimulus might pressure the inflation rate to rise further.

Ahmed Razman added that with rumours of the 15th general election being around the corner, political conditions would also probably affect the ringgit's performance. - Bernama

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