(Bloomberg) -- Malaysia expects its economy to expand close to 5% this year amid rising investments.
Finance Minister Lim Guan Eng called on representatives from other ministries as well as from banks and companies, who attended the 2020 state budget hearing, to support the country’s growth. The government estimated 4.9% economic expansion in this year’s budget, before the central bank lowered its forecast to 4.3% to 4.8% in March. Next year’s budget will be tabled on Oct. 11.
“Malaysia places a premium on economic growth and the consolidation is proceeding without sacrificing the well-being of the people,” Lim said on Tuesday. “The government would like to spend more, but at the end of the day, legacy issues like 1MDB are still something we need to deal with.”
Here are more comments from the finance minister:
- Malaysia expects to ease its fiscal deficit to below 3% of GDP by 2021. This is in line with the government’s previous target for the gap to narrow to 2.8% of GDP by then
- The 1MDB scandal as well as losses in other state-linked agencies from Felda to the Hajj fund remain a hurdle for the administration, which estimates 150 billion ringgit ($36 billion) of losses in total
- The government is preparing a cost of living index to complement inflation, which has stayed below 1% for the past 12 months. The new index will help determine the minimum living cost required by each Malaysian and inform state policies
- Investments rose 3.1% from a year ago in the first quarter, with foreign-direct investments into manufacturing surging 127%. Malaysia’s competitiveness allowed it to “benefit greatly” from the U.S.-China trade war, but a prolonged tiff would hurt everyone, Lim said
- Malaysia is planning to tackle youth unemployment, which reached 10.9% in 2018 compared with the overall 3.4% unemployment rate, by enrolling some 500,000 young Malaysians through multiple career programs
