No pain, no gain

1 Nov 2018 By Clara Ferreira Marques

Mahathir Mohamad’s government is set to present the $300 bln economy’s most significant blueprint in decades. It needs to burnish reform credentials and soothe rating agencies. Outlining a credible tax plan will be a start; a plan to reduce the state’s role is the bigger prize.

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Malaysia’s government, which came to power after a shock electoral victory in May, is due to present its first budget on Nov. 2.

The plan is expected to address a revenue shortfall arising from a decision to scrap the goods and services tax (GST), among other campaign promises, and to include significant spending cuts.

Presenting a midterm review of a five-year development plan on Oct. 18, Prime Minister Mahathir Mohamad said the country would see a wider fiscal deficit and slower economic growth over the next two years. The government has already revised national debt up to 1 trillion ringgit ($240 billion), recognising borrowings previously left off balance sheet.

According to that plan, Malaysia targets economic growth of 4.5 to 5.5 percent a year between 2018 and 2020.

Context News

Malaysia’s government, which came to power after a shock electoral victory in May, is due to present its first budget on Nov. 2.

The plan is expected to address a revenue shortfall arising from a decision to scrap the goods and services tax (GST), among other campaign promises, and to include significant spending cuts.

According to that plan, Malaysia targets economic growth of 4.5 to 5.5 percent a year between 2018 and 2020.

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