Malaysia seeks to expedite priority projects while plugging leakages in its review of the 2023 budget amid rising sovereign debt levels, according to Prime Minister Anwar Ibrahim.
(Bloomberg) — Malaysia seeks to expedite priority projects while plugging leakages in its review of the 2023 budget amid rising sovereign debt levels, according to Prime Minister Anwar Ibrahim.
The government will prioritize ramping up the nation’s participation in technology and green economy and also focus on boosting small and medium enterprises even as it maintains fiscal discipline, Anwar said at a budget dialogue held in the administrative capital of Putrajaya Tuesday.
Debt and liabilities are at about 1.5 trillion ringgit ($346 billion) currently, Anwar said, adding the budget deficit was about 5.8% of gross domestic product in 2022. This year’s fiscal position won’t be comfortable, he said.
“The government must accept this fact, it cannot be businesses as usual, we cannot be content,” he said, adding that the maximum debt service is already approaching a level that’s more than what the country can manage.
Anwar, who doubles as finance minister, is set to table the revised 2023 budget to parliament on Feb. 24 against the backdrop of lingering price pressures at home and increasing risks to the global economy. A reformist who heads a multiracial coalition, Anwar has made protecting low- and middle-income groups from rising prices the top priority of his administration.
The previous government presented a tighter budget for 2023 in October, seeking to narrow the fiscal deficit. Parliament was dissolved before lawmakers could approve that spending plan, requiring Anwar to present a fresh budget that supports his coalition government’s aspirations.
The government saw about 4 billion ringgit in leakages from a flood project alone and can save about 10 billion in the procurement system, Anwar said while ordering agencies to speed up public works approvals.
READ: Malaysia PM To Review Predecessor’s Billion-Ringgit Projects (2)
Anwar said his government will retain the ideal items in the budget but will make necessary changes to some to reflect the voters’ wishes. Malaysia is expediting the distribution this quarter of 1.67 billion ringgit in cash aid to the poor, he said Monday.
The government is unlikely to make “drastic revisions” to this year’s growth forecast as it finalizes data ahead of the budget presentation, Economy Minister Rafizi Ramli said last week.
Malaysia’s economic growth is projected to slow to 4%-5% in 2023, from a more than 7% estimate for last year, the central bank had said.
(A previous version of this story corrected government debt value in second paragraph.)
(Updates with Anwar’s comment in fourth paragraph)
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