KUALA LUMPUR: The recent strength of the economy and the ringgit has given the government more room to navigate to meet its fiscal targets, according to Economy Minister Rafizi Ramli.
He said this while responding to a query on how the government plans to meet its 4.3 per cent fiscal deficit target for the year, without rationalising RON95 subsidies.
"I think we should wait for Budget 2025 and the months after that, because certain things have changed, for example with higher economic growth, that means that we have slightly more room to navigate to meet our fiscal glide target."
"There's also certain changes, for example, the strengthening of the ringgit also means less pressure on subsidy bills."
"I think what is most important to the government is to balance everything because whatever we decide, all these parameters are interconnected like the fiscal target, inflation and especially pressure on the cost of living," he told reporters after the World Bank's 30th Malaysia Economic Monitor Public Launch today.
Rafizi said the ultimate objective is to make public finance a lot more sustainable.
"I think we have a few policy options as to what government adopts sequentially and that is why I keep saying sequencing is extremely important."
"My view is that so long this government has more options to navigate, then we will be able to balance these competing priorities better, while at the same time we will move closer to the fiscal consolidation target," he explained.
On the government's ruling out of goods and services tax (GST), for now, to raise revenue, Rafizi said the government is making adjustments to optimise spending as a means of meeting its fiscal consolidation target.
"I feel that while we acknowledge the need to increase revenue, there is some room that we can make to optimise spending, about how to sequence rationalisation of government expenditure."
"We are going through that process and I think it's important for the government to demonstrate that we have done everything possible to optimise our spending to give the best value," he said.
"At the same time, growing the economy so that the income level of the population reaches a certain level, and discussion about how to generate income has also to be benchmarked against this too, and I think that is the position that the government takes now," Rafizi explained.