KUALA LUMPUR: Affin Bank Bhd expects the 2023 Budget to remain expansionary and hopes that the government will continue to take key measures that will stimulate and catalyse economic growth as well as initiatives that will reduce people's burden.
President and group chief executive officer Datuk Wan Razly Abdullah said for next year's budget, the government's development expenditure (DE) was expected to remain significant to stimulate local economic growth.
"If you look at the 12th Malaysia Plan (12MP), almost RM70 billion is allocated on average every year for the first two years. We expect this DE to increase to RM90 billion in 2023.
"This DE is important for the success of infrastructure projects towards achieving 12MP's objectives, and these include investment in renewable energy, flood mitigation projects and water resource management, new hospital construction work and existing hospital upgrades as well as highway infrastructure and also the East Coast Rail Link (ECRL)," he said during an interview with Media Prima Group here on Wednesday.
Besides that, Wan Razly is hopeful that the government will consider three of the bank's budget wishlist for 2023 to further assist the small and medium enterprises (SMEs), the tourism sector, and the rakyat at large.
"Firstly, we hope the government will introduce remuneration and assistance to SMEs as they are the engine of Malaysia's economic growth. We need to support their post-pandemic recovery efforts and ensure local SMEs remain competitive.
"Secondly, measures to stimulate the tourism sector and encourage the entry of foreign tourists. This will result in employment, business and related service opportunities.
"Lastly, we hope the government will prioritise the welfare of the rakyat through direct assistance to those in need, as well as improving their skills, especially in the field of IT and technology," he said.
On the other hand, Wan Razly said the bank also hoped for the government to further introduce initiatives that would further enforce its efforts towards the development of green development and sectors.
"We expect initiatives involving green development to be one of the components in the 2023 Budget. Going green helps in terms of the cost savings given the high cost of commodities at the moment and we see that there will be a strong push in the budget.
"There are a lot more that we can do in green initiatives - whether we can contribute more towards the expansion of solar energy, more electric vehicles - and we encouraged this to our SMEs customers," he added.
Wan Razly said the bank aimed to achieve four per cent in environmental, social, and governance (ESG) financing and loan portfolio for 2022 from the 1.8 per cent approved in the second quarter (Q2) this year.
"The bank is always ready to provide support to our customers in terms of green financing for them to evolve their businesses into green businesses.
"We are at the early phase of going green and we look forward to the government encouraging this and pushing it further so the momentum builds going forward in the future," he said.
Meanwhile, Wan Razly said the bank believed that Malaysia's economy would not go into a recession and is able to withstand the strong external headwinds that come given the country's strong economic fundamentals.
This is despite the volatility in the global economy caused by the increase in commodity prices resulting from the Ukraine-Russia conflict, hikes in interest rates by the US Federal Reserve as well as the slower growth of major world economies such as China.
"Malaysia has successfully dealt with various economic crises before. Through the re-opening of national borders, the Malaysian government needs to stimulate the tourism sector, which before the pandemic contributed about seven per cent or RM100 billion to the country's gross domestic product in 2019.
"We need to aim for this contribution to double next year because the tourism sector also helps generate local economic growth, such as the hospitality, transport and service industries. I believe the Malaysian economy would not go into a recession but we need to be alert to the risks of slower economic growth projection next year," he said.
Wan Razly said Affin group was cautiously optimistic on its prospects going forward.
"2022 is an important year for us as this is the year where we will be reaching the end of our AIM22 that was introduced in 2020. Despite the challenging start to the year 2022, we managed to make progress. While domestic economic activity is starting to recover, we are wary of potential external headwinds.
"We still have three months left and we shall see how we match up against the AIM22 targets when the year comes to an end," he said.
He said Affin would be unveiling its A25 strategic plan for the period of 2023-2025 which represents the next phase of its "metamorphosis journey".
"Our priority is to ensure sustainable, organic growth of our core businesses namely the conventional, Islamic and investment banking. Affin Bank will continue to ramp up its efforts in delivering innovative products and solutions to the market, investing in digital space, as we aim to provide an unrivalled experience for all of our customers," he said.