KUALA LUMPUR: Malaysia should be able to pursue higher economic growth going forward if the government can sustain discipline to ease its fiscal constraints, according to RAM Rating Services Bhd (RAM Ratings).
The credit rating agency said it is heartened that fiscal consolidation remains a high priority for the present government.
“While still relatively high, the fiscal deficit is expected to improve marginally to five per cent by end-2023. But government debt is estimated to remain hefty at RM1.17 trillion (62 per cent of Gross Domestic Product) with still-elevated debt-servicing costs estimated at 15.9 per cent of revenue in 2023.
“If the government can sustain discipline to ease its fiscal constraints, this could allow the country to pursue higher economic growth going forward,” it said in its statement commenting on Budget 2023.
RAM Ratings also noted that the revised Budget 2023, with a total allocation of RM388.1 billion, aims to reduce social disparity for lower income groups, support digital transformation of small businesses, and sustain growth for key sectors.
“Tax cuts for micro, small and medium enterprises and the M40 group, maintained electricity tariffs for domestic users and MSMEs, and cash handouts should help sustain this year’s domestic demand amid high cost of living and softer global growth,” it said.
For 2023, the government expects the economy to grow at 4.5 per cent, which RAM Ratings said is the mid-point of the agency’s 4-5 per cent estimate. – BERNAMA
