A fiscal deficit for tough times

Photo: AZMAN GHANI/The Star

WHILE the government tries to protect the economy and livelihoods from the effects of the Covid-19-triggered movement control order, concerns about the country’s higher fiscal deficit and public debt have surfaced.

According to Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz, Malaysia’s fiscal deficit is expected to register at 5.8% to 6% of Gross Domestic Product (GDP) this year (“Malaysia’s debt levels set to rise this year”, The Star, Oct 6; online at bit.ly/star_debt”). Local economists are expecting an even higher deficit, ranging from 6.5% to 7.5%. This is after taking into account the stimulus packages the government has announced so far, which total RM305bil.