PUTRAJAYA: The Ministry of Finance said Malaysia will meet its projected budget deficit of 2.8 per cent of gross domestic product for 2018.
Finance Minister Lim Guan Eng said this was despite the government’s revenue being set back by a RM21 billion loss from the zero rating of Goods and Services Tax effective today (June 1).
Lim said the RM21 billion hole would be partially offset in by a total of RM14.4 million income to be generated from certain sources. They are revenue from higher global oil prices (RM5.4 billion), higher dividends from government linked companies (RM5 billion) and proceeds from Sales and Service Tax (RM4 billion).
Besides that, Lim said the government should be able to save at least RM10 billion from spending cuts on high-priced projects such as those awarded via direct negotiation or a limited tender exercise, non-essential operating expenditure and certain big-ticket budget allocations for mega projects.
The projects included the RM350 million renovation and rehabilitation of Sultan Abdul Samad Building, Malaysia-Singapore High Speed Rail and Mass Rapid Transit 3.
“In the longer term, the government would save billions of ringgit when these projects were to be re-tendered or scrapped altogether,” he said at a press conference here today.
Lim said the projected fiscal deficit would increase to RM40.1 billion from RM39.8 billion, which would maintain the government budget deficit at 2.8 per cent of the GDP.
“In addition, the government’s current balance will also remain positive,” he said.