KUALA LUMPUR, Aug 15 — Malaysia’s economy needs to pivot to more productive sectors with better economic multipliers, while planning for more targeted approaches needed for direct aid and other incentives for the public and businesses, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz has said.
“To get to the GDP growth that we want I need to have a developmental expenditure that has the right multiplier. But private investment is also key, and I will have to look at private investment in which sector, that will give the highest multiplier,” he said.
Tengku Zafrul said this during an interview with Malay Mail and Singapore’s Straits Times in Kuala Selangor yesterday, when he was asked to comment on what his targets were for Budget 2023 which he is expected to table in October.
He acknowledged that because general elections were expected soon after the Budget is tabled, the government’s financial plans would likely be “people-centric.”
But he said the government would need to be not just responsive but responsible as well.
“This year our deficit target is six per cent and we are going to meet the target. The plan is still to meet the target despite subsidies.
“But next year, we have to be fiscally responsible as well. We need the fiscal space for when times are bad again,” he said.
He said that in order to be fiscally responsible, the country’s deficit would have to be lower next year.
Malaysia, he said, had also committed in the 12th Malaysia Plan to lower its deficit to 3.5 per cent by 2025.
Tengku Zafrul said Malaysia should eventually move towards cutting subsidies while giving targeted cash aid and incentives to the public.
“We can do that when we have the right technology and data is cleaner. Targeted cash aid is the right way, and it has to be clear these are the group who should get it. We need to move slowly towards that.
“People who don’t deserve it (subsidies) get it now. There are also leakages,” he said.