KUALA LUMPUR: The government affirmed the importance of increasing the debt ceiling to 65 percent of gross domestic product (GDP) to have leeway to finance the government’s budget deficit in the medium term, including financing needs for the implementation of the 12th Malaysian Plan (12MP).
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz (pix) said that although the government’s debt ceiling was raised to 65%, what was more important was the government’s ability to repay the loan.
âIf we were to pull the break too quickly, when we suddenly don’t want to spend or pursue expansionary fiscal policies, our economy will not be able to recover any faster than expected.
“Thus, the important responsibility of the government is to ensure that its financial situation remains stable so that it is ready and able to implement counter-cyclical measures in the event of a crisis,” he said in a special interview. on the theme âBudget 2022 From Rakyat to Rakyatâ on Bernama TV and Astro Awani tonight.
Tengku Zafrul said the government’s revenue projections were not sufficient for 2022 to fund all of the programs announced in the budget yesterday, especially for large projects.
Therefore, the government will have a deficit of 6.0 percent based on GDP growth of between 5.5 and 6.5 percent next year.
“It’s lower than this year’s deficit, which should be 6.5%, but because our GDP is expected to improve next year, so it helps to reduce the deficit rate even though we have a fiscal policy. expansionist with a total allocation of 332 RM2. 1 billion.
“So this 6.0 percent represents a deficit of around 100 billion ringgit that we have to pay off through debt. Alhamdulillah, we have the option to borrow next year,” he said. declared.
Tengku Zafrul said when tabling the 2021 budget, the government expected this year to be a year of recovery, however, the budget was written before the production of COVID-19 vaccines and the existence of new variants such than Delta.
âSo we cannot assume that this situation cannot happen. We must always expect it and we must have a plan B. “
To this end, Tengku Zafrul said on October 11 that Dewan Rakyat approved an increase in the limit of the COVID-19 Fund from 65 to 110 billion RM, an increase in the statutory debt ceiling of the federal government from 60% to 65. percent of GDP.
With this approval, he said the government had leeway to borrow more and spend more to help the people, protect the well-being of the people and ensure business continuity.
Regarding the main challenges of preparing the 2022 budget, Tengku Zafrul said that the main challenge is to prepare a budget that could meet the needs of different parties, especially when the government has spent a lot of money to help people and communities. companies get through tough times. since last year.
At over RM 332.1 billion, the 2022 budget will be the largest in the country, surpassing the RM 321 billion expected to be spent this year, with a focus on reviving each socio-economic segment of the country.
The budget on the theme âKeluarga Malaysia, Makmur Sejahteraâ (A prosperous Malaysian family) includes RM 233.5 billion in operating expenses, RM 75.6 billion in development expenses and RM 23 billion for the COVID- Fund. 19.-Bernama