KUALA LUMPUR: Deputy Finance Minister II, Datuk Johari Abdul Ghani is confident that Malaysia will be able to meet its deficit target by year-end 2016.
The minister said this in response to Fitch Ratings predictions that the government may miss its 2016 fiscal deficit target as the economy remains under pressure from lower commodity prices.
“The year still has not ended and 2016 is still a long way to go,” he said at the launch of Credit Guarantee Corporation Malaysia Bhd (CGC)’s BizWanita direct financing product this morning.
“As you know, Malaysia have very strong economic fundamentals and I am confident that we will be able to achieve the target deficit, despite all the challenges by end of 2016.”
Fitch had earlier this week noted that there could be a risk of Malaysia missing its 2016 fiscal deficit target of 3.1 per cent of gross domestic product (GDP), even though the government’s debt level would likely remain stable.
The rating agency expect Malaysia’s federal debt to stay at about 52 per cent of GDP until 2017.
It attributed this to the evolution of non budget contingent liabilities, including government guarantees, will bear monitoring as well as shifting foreign investors appetite.
Malaysia’s Budget 2016 as announced by Prime Minister Datuk Seri Najib Razak last Friday had projected a reduction in the fiscal-deficit-to-GDP to 3.1 per cent from 3.2 per cent expected for 2015.
It also estimated the share of revenue in GDP to drop by one percentage point relative to 2015, due to the expected decline in dividend from state oil firm Petroliam Nasional Bhd to RM16 billion from RM26 billion in 2015.