Malaysia’s 2020 fiscal deficit of 3.2 pct in line with expectation – S&P
S&P Global Ratings (S&P) said Malaysia’s fiscal deficit projection of 3.2 per cent of gross domestic product (GDP) for 2020 is broadly in line with expectations, given the difficult external environment and various constraints against boosting revenues. In a statement issued today, S&P analyst Andrew Wood said, “We’ll continue to closely observe fiscal consolidation progress in Malaysia, especially in the context of the containment and reduction of government debt ratios, and following relatively higher deficits in 2018 and 2019.”
In July, S&P affirmed Malaysia’s issuer credit rating at A- with a stable outlook, while Fitch Ratings also confirmed Malaysia’s sovereign credit ratings at A- with a stable outlook. The government is on track to achieve the target deficit of 3.4 per cent of GDP this year.
In the 2020 Budget tabled last Friday, the fiscal target was revised to 3.2 per cent of GDP in 2020 from 3.0 per cent previously, but it remained on track to average at 2.8 per cent of GDP in the medium term. Finance Minister, Lim Guan Eng had earlier reiterated that the government is on the right course to put the country back on its fiscal track and restore the economy as espoused in its three-year financial roadmap, despite entrenched uncertainties brought about by the United States-China trade war which has reoriented the global supply chain.