KUALA LUMPUR: The Perikatan Nasional's (PN) government has allocated a total of RM322.5 billion for the 2021 Budget, which is an increase of 8.6 per cent compared to the Pakatan Harapan administration's 2020 budget allocation of RM297 billion.
Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the 2021 Budget is the largest expenditure in Malaysia's history.
"Of the total, RM236.5 billion is for the operating expenditure (OE), RM69 billion for development expenditure (DE) and the remaining RM17 billion would be used for the Covid-19 Fund," he said when tabling the 2021 Budget in the Dewan Rakyat today.
Tengku Zafrul said additionally, RM2 billion would be allocated for contingency savings.
Overall, he said Malaysia's 2021 fiscal deficit is projected at 5.4 per cent of the gross domestic product (GDP).
Tengku Zafrul also said the government would not compromise in protecting the rakyat's lives and their livelihoods, despite a lower environment yield brought about by its fight against Covid-19.
"The total expenditure for 2020 is estimated at RM314.7 billion, an increase of RM17.7 billion compared to the initial projection.
"The increase in expenditure is aimed at financing the stimulus package and economic recovery," he said.
Tengku Zafrul said the country's fiscal deficit for 2020 is estimated to increase to 6 per cent of the GDP compared to the initial target of 3.2 per cent.
"The effects of the Covid-19 pandemic will continue to be felt next year. Therefore, government revenue collection for the year 2021 is expected to increase to RM236.9 billion.
"However, we have decided that the 2021 Budget would be an expanding or expansionary budget," he said.
Tengku Zafrul described 2020 as being filled with challenging events for the country as the Covid-19 pandemic not only claimed lives, but had also undermined global economies.
"There are no guidelines nor any past clues that can be used as a reference. This is an unprecedented crisis that shocked supply and demand, disrupting the supply chain as well as suppressing the business ecosystem," he said.
He said the country was also facing uncertainties of the external environment, falling commodity prices and space limited fiscal.
Meanwhile, he said the International Monetary Fund (IMF) has projected the global economy to record a negative growth at 4.4 per cent this year, while the global trade is expected to shrink at 10.4 per cent.
Tengku Zafrul said the health crisis has affected over 150 countries globally, the worst economic crisis since the Great Depression in 1930s.
"The government has given priority to protect the rakyat with the implementation of the Movement Control Order (MCO), even though we knew these would have a profound effect on the economic activities and social welfare in two months," he added.
According to Bank Negara Malaysia, the country incurred losses of between RM2 and RM2.4 billion a day due to the economic closure.