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Fiscal deficit to narrow to 2.8% of GDP

  • PM Najib tabling Budget 2018 at Dewan Rakyat this afternoon. Photo courtesy: Bernama
  • PM Najib tabling Budget 2018 at Dewan Rakyat this afternoon.
  • PM Najib performing prayers at the prime minister's office in the Parliament before tabling Budget 2018.
  • PM Najib arriving at the Parliament at about 3.15 p.m. in blue color Baju Melayu.

KUALA LUMPUR, Oct 27 (MySinchew) -- Prime minister cum finance minister Datuk Seri Najib Tun Razak tables Budget 2018 at Dewan Rakyat at 3.30p.m. this afternoon.

He arrived at the Parliament at about 3.15 p.m. in blue color Baju Melayu and performed his prayers at the prime minister's office in the Parliament before tabling the Budget.

The following are the highlights of 2017/2018 Economic Report and Budget 2018:

2017/2018 Economic Report

- The Malaysian economy recorded 5.7% growth during the first half of 2017, and continued to be the preferred investment destination with RM25.2bn in FDI.

- DFTZ is expected to create 60,000 jobs and double exports of SMEs to RM162.9bn by 2025.

- 83,809 houses have been completed as at end-August 2017 under the People's Housing Programme (PPR) and MyBeautiful New Home (MyBNHome).

- 454,609 business entities have been registered under GST as at end-September 2017.

- Driven by resilient domestic demand and favorable external factors, the country's GDP is expected to expand between 5.0% and 5.5% in 2018.

- Private sector expenditure to expand by 7.3% (2017: 7.4%) while private consumption will grow 6.8% (2017: 6.9%).

- Nominal gross national income (GNI) per capita to increase by 5.1% to RM42,777 in 2018 (2017: RM40,713).

- Total investment expected to increase by 6.7%, accounting for 25.5% of GDP in 2018.

- Private investment is estimated to reach RM260bn in 2018 (2017: RM230bn).

- Inflation to remain benign at between 2.5% and 3.5%.

- Gross national savings (GNS) to grow at 6.2% to RM403.6bn with share of GNS to GNI remaining high at 28.7% (2017: 9.5%, RM380.2bn; 29.1%).

- Services sector to grow 5.8%, increasing its share of GDP to 54.8% (2017:5.9%; 54.5%).

- Construction industry is forecast to grow at 7.5% (2017: 7.6%), supported by ongoing infrastructure projects.

- Gross exports to expand 3.4% to RM948.7bn (2017: RM917.5bn), while imports to grow 3.5% to RM851bn (2017: RM822.9 billion)

- Federal government debt remains sustainable within the prudent limit of 55 per cent of GDP in 2018.

- Outstanding external debt decreased to RM877.5bn or 65.2% of GDP as at end-June this year, compared with RM916.1bn or 74.5% at end-2016.

Budget 2018

- Theme for Budget 2018: "Prospering an Inclusive Economy, Balancing Between Worldly and Hereafter, for the Well-being of Rakyat, Towards the TN50 Aspiration".

- Najib proposed an allocation of RM280.25bn for Budget 2018 (compared to RM260.8bn in Budget 2017), with RM234.25bn for operating expenditure and RM46bn for development expenditure.

- Fiscal deficit to narrow further to 2.8% of GDP in 2018 from 3% in 2017.

- Federal government's revenue collection is expected to record RM239.86bn in 2018 (2017: RM219.7bn).

- RM200 million is allocated to SMEs for training programmes, grants and soft loans under the SME Corp.

- RM110 million is allocated for an alternative road to Port Klang.

- MRT2 Sungai Buloh-Serdang-Putrajaya Line project to cost about RM32 billion.

- Government to expedite the construction of MRT3 or Circle Line set for completion by 2025.

- Pulau Pangkor is declared a duty-free island while a special Border Economic Zone in Bukit Kayu Hitam will be developed.

- Penang International Airport and Langkawi International Airport will be upgraded.

- The government is allocating RM550 million for the Special Fund for School Upgrading and Maintenance, encompassing national schools (RM250 million), national-type Chinese schools (RM50 million), national-type Tamil schools (RM50 million), missionary schools (RM50 million), boarding schools (RM50 million), MARA Junior Science Colleges (RM50 million) and government-aided religious schools (RM50 million).

- Toll collection at Batu Tiga, Sungai Rasau (Selangor) Bukit Kayu Hitam (Kedah) and Eastern Dispersal Link (Johor) to be abolished.

- Every Malaysian born from Jan 1, 2018 to 2022 will be provided with an Initial Savings Fund of RM200 through PNB's Unit Trust Scheme, Amanah Dana Anak Malaysia (ADAM50).

- Individual income tax rates reduction of two percentage points for income tax band between RM20,000 and RM70,000, which will increase disposal income between RM300 and RM1,000.

- Zero-rated GST for reading materials comprising all types of magazines and comics effective Jan 1, 2018.

- Services by local authorities will not be subjected to GST effective April 1 or Oct 1, 2018, depending on local authorities.

- At least 30% participation of women as board of directors in GLCs and GLICs as well as statutory bodies by end-2018.

- RM517 million for flood mitigation programmes.

- RM83.5 million to construct infrastructure of first phase of DFTZ in Aeropolis KLIA.

...More to follow

 

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