Malaysia's economy is revived, according to Budget 2022

[ASEAN NOW Content Team]

 

According to the publication, if the money is spent judiciously where it is most needed, Malaysia would rise like a phoenix reborn.

 

The 2022 Budget will be presented in the Lower House on Friday, October 29.

Last year's budget reached a high of RM322.54 billion (S$104.81 billion) due to the Covid-19 pandemic, with a budgetary deficit of 6% of GDP.
The four primary themes of the 2021 Budget were: caring for people, directing the economy, living sustainably, and improving public service performance.

 

Unfortunately, due to the epidemic being far more deadly than previously believed, this year's economic growth has never reflected these enormous budgetary allocations.

 

Earlier this year, finance minister Tengku Zafrul and Bank Negara confidently predicted that the country's GDP growth for 2021 would be in the range of 6 to 7.5 percent, but the IMF and World Bank reduced this lower to only 3.3 percent in the third quarter.
Fitch Ratings was even more negative, forecasting 0% growth for the country in its latest evaluation report, only to be revised upward to 1%.

 

The deeper the fall, the bigger the rebound. If the coronavirus pandemic is further contained next year, Bloomberg predicts a 5.65 per cent growth for Malaysia next year, meaning a V-shaped recovery is anticipated, barring any unforeseen circumstances such as politics or worsening Covid-19 situation.

The finance minister has earlier pointed out that the 2022 Budget will focus on "recovery, rebuilding national resilience and catalysing reform".

 

First and foremost, the global economy must be restarted in 2022, while businesses and individuals must reclaim their livelihoods.
The next step is to repair the economic sectors that have been most severely harmed by the pandemic so that they can continue to exist.
Finally, through catalysing reform, the various action plans under the 12th Malaysia Plan will be extended to the "Vision 2030."

Simply said, recovery and rebuilding are critical, while reformation is necessary to meet the nation's long-term goals.

 

For many years, annual budgets have set aside more than 70% of fiscal allocations for government running expenditures, which includes civil servant salaries and pensions, as well as compensations.
Only RM65 billion of the RM332.5 billion budget for 2021 was set aside for development spending.

It's quite improbable that another lockdown will be implemented, based on how the government is currently handling the pandemic.
When businesses are fully operational again, the demand for financial help for businesses and individuals will be greatly reduced.

 

Aside from the funds set aside to combat the pandemic and maintain medical care and public healthcare costs, the 2022 Budget should place a greater emphasis on investing in the country's economic recovery rather than handing out life-saving handouts to the rakyat.

The government has spent much too much money in the last two years giving financial help to businesses and individuals, which has had little impact on the country's economic recovery.

 

As a result, some enterprises that need need government assistance have been blocked out, while important public infrastructure projects have stalled, setting off a chain reaction of slow development and a decreasing economy as a result of the vicious cycle of corporate closures.

Total allocations for the 2019 Budget are expected to exceed last year's RM332.5 billion, with more than RM70 billion earmarked for development spending.