Malaysia's Proactive Measures Indication Of Govt's Continued Focus On Fiscal Consolidation

By Tengku Noor Shamsiah Tengku Abdullah SINGAPORE, Jan 22 (Bernama) -- Proactive measures announced by Prime Minister Najib Razak on Tuesday to ensure Malaysia’s growth, development and deficit ambitions remained on track is an indication of the government's continued focus on fiscal consolidation, says Standard and Poor's Ratings Services. Associate Director of Sovereign Ratings YeeFarn Phua said:"The sharp decline in oil prices since late 2014 meant that government is unlikely to achieve its initial projected budget deficit of three per cent. "The government expects to achieve the revised projection of 3.2 per cent of Gross Domestic Product (GDP) largely through spending cuts," he said when commenting on the measures taken to strengthen Malaysia's economic resilience. Nevertheless, Phua warned a prolonged slump in crude oil prices could derail fiscal consolidation efforts. "The risks are that the contracting oil and gas sector could affect activities in other sectors and bring down overall economic growth. "For 2015, it could put at risk the authorities’ revised 2015 GDP forecast of between 4.5 per cent and 5.5 per cent, especially if growth of domestic consumption and investment also weakened," he added. -- BERNAMA