Despite falling global oil prices, Malaysia – an oil-exporting nation – is not in danger of falling into a recession similar to that experienced in the late 90s, Prime Minister Najib Razak said.
In a special message to address the adjustments made to the 2015 budget, the PM said the new strategies to be employed by the Federal Government were aimed at bolstering Malaysia’s economic resilience following external developments in the global economy, that were out of the government’s hands.
He said the RM48.5 billion allocated for development would be maintained and spent, but that operating expenditure would be reduced by RM5.5 billion by reprioritising.
Najib added that existing projects in the pipeline, such as the Pan-Borneo Highway, MRT Line 2, LRT 3, the Kuala Lumpur-Singapore High-Speed Rail, and infrastructure initiatives such as public housing, flood mitigation, water supply, and electricity.
He will table the Eleventh Malaysia Plan (11MP) in May to further outline the development expenditure lasting until 2020.
Najib said the adjustments to the 2015 Budget were necessary as the global price of Dated Brent oil had plummeted from USD100 last October to around USD48 currently.
“However, at the forecast price of USD55 per barrel, there will be a revenue shortfall of RM13.8 billion.
“If we compare the revised figures with that of the 2015 Budget, despite the savings of RM10.7 billion from the implementation of the managed float mechanism for retail fuel prices, the government is still facing a revenue shortfall of RM8.3 billion to accommodate the budget measures,” he said, as reported by Bernama.
Putrajaya has also revised the fiscal deficit target up 0.2% to 3.2% of the gross domestic product (GDP) in 2015.
“Let me stress that in our resolve, we have tried to plan, formulate, organise and find solutions in implementing every measure to our level best in the interest and needs of the people,” Najib said.
