Revised budget shows commitment to fiscal consolidation – Moody’s

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Written by Syndicated News

KUALA LUMPUR, Feb 1 2016 : Moody’s Investors Service expects the Malaysian government to narrow the fiscal deficit for a sixth consecutive year last year.

In its article “Moody’s Credit Outlook”, the rating agency said the Malaysian government has put together a package of both revenue and expenditure measures to maintain the trend of fiscal deficit consolidation.

The recalibration announced by the Prime Minister Datuk Seri Najib Tun Razak last week, which came three months after the original budget in late October and less than one month into the fiscal year, highlighted the proactive management by the government.

Moody’s said the administration further demonstrated its credit-positive commitment to fiscal consolidation by retaining its deficit target at 3.1 per cent of gross domestic product (GDP) in 2016, and emphasising that government debt will not exceed its cap of 55 per cent of GDP.

Meanwhile, revenue as a share of GDP in 2016 will likely fall to its lowest level since 2000, but a corresponding decrease in expenditures should sustain fiscal consolidation, said Moody’s. – Bernama



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