GEORGE TOWN: The government is confident that the economic situation will improve this year coupled with increased allocation for government spending, says Finance Minister Lim Guan Eng.
He pointed out that the confidence was based on five reasons — rise in commodity prices, easing of the Sino-American trade war, increase in government spending, institutional reforms and new initiatives to pump funds into the market.
“We are confident that the economic situation in 2020 will be far better compared to last year.
“This is because of commodity prices going up and we can see that not only in terms of petrol prices but also palm oil prices.
“The trade war (between China and the United States) is also expected to stabilise with the tensions reducing.”
Lim was commenting on a study by the Merdeka Centre titled “Malaysia Political Developments and Trajectories Update” which found that 61 per cent of the voters were concerned about the the country’s economic situation.
He said there would be an increase in government spending this year because some allocations were stalled last year due to disbursement issues.
“So that means there will be two times spending and what we call a double-barrel,” he said.
Lim said institutional reforms would also see greater savings and increased efficiency which would, in turn, generate a better economy.
“The fifth reason is that we have a few initiatives that will pump funds into the market, like the E-wallet initiative which will be launched in the middle of this month and the #MalaysiaKerja initiative.”
Lim said despite economic challenges, the country had managed to handle the pressure with aplomb.
“As a sovereign country, we have tried to handle economic issues based on economic fundamentals, where we ensure that the fundamentals remain strong and are stable in terms of fiscal and financial, as well as ensure the confidence of investors and international agencies
“In 19 months, even though we faced various challenges following the trade war, we were able to overcome the challenges and saw a nearly 100 per cent increase in foreign investment.
“The international credit rating agencies also reaffirmed and maintained Malaysia’s credit rating even though we revealed the actual financial situation was not as good as portrayed by the previous government, which was embroiled in various financial scandals from 1MDB (1Malaysia Development Bhd).
“However, even with such big issues, the agencies are still confident of our ability to handle the problems.”
Lim added that the government had drafted a three-year plan to restore and stabilise the country’s finances and that the plan would end next year.
“To date, it (the plan) is still on schedule.
“We can see that economic growth is still healthy with a 4.7 per cent gross domestic product growth, which is much better than other countries.”
