THE issuance of the Pre-Budget Statement (PBS) which is the first in Malaysia’s history, has been applauded by TA Securities Research for enhancing transparency, managing expectations, increasing public confidence and encouraging the provision of feedback in the budget formulation process.
The Finance Ministry (MOF) had issued the PBS yesterday which is basically divided into two parts:
• Budget 2021 updates: Through the publication of the PBS, everyone would be able to track this year’s key economic metrics such as the economic outlook / performance to date, tax revenue performance status as well as expenditure status so far.
• Budget 2022 expectations: At the same time, the PBS also provide a preliminary overview of the direction, approach and expected benefits for the upcoming Budget.
“In the PBS, key macroeconomic projections for 2022 were not highlighted PBS,” observed economists Shazma Juliana Abu Bakar and Farid Burhanuddin in an update on the Malaysian economy.
“However, they (MOF) cited the IMF (International Monetary Fund) and World Bank’s forecast that the Malaysian economy to expand by 6.0% and 5.0% respectively next year, a return to the pre-pandemic level.”
Budget 2022 will be drafted with an inclusive approach in the “Keluarga Malaysia” spirit and will work to ensure that nobody is left behind in receiving government aid, according to the PBS.
This gives the impression that those impacted by the extended movement control orders (MCOs) or restrictions imposed to curb COVID-19 will continue receiving government support.
The MOF further stated that Budget 2022 will focus on three key themes:
• Continuing programmes to support and spur economic recovery in line with the gradual reopening of the economic sectors.
• Rebuilding national resilience such as the nation’s public health system and digital and technological infrastructure;
• Catalising structural reforms that will drive economic growth, inclusiveness and sustainability in the medium term.
This includes Malaysia’s five-year blueprint 12th Malaysia Plan (12MP) for 2021 to 2025 and the United Nations’ Sustainable Development Goals (SDGs) and Malaysia’s Shared Prosperity Vision 2030 (SPV 2030).
The 12MP is expected to be tabled in the Dewan Rakyat on Sept 27 while Budget 2022 is expected to be tabled on Oct 29. – Sept 1, 2021
