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Budget deficit may exceed 5% in 2009

KUALA LUMPUR, 3 Feb 2009: The budget deficit this year is likely to exceed five percent due to increased government spending, resulting from pump priming, to spur the economy, according to analysts.

The government announced a RM7 billion stimulus package on 4 Nov last year to face the global economic slowdown and is expected to reveal another worth RM10 billion in April.

The official budget deficit estimate for 2009 is 4.8%.

“Although the government remains committed to containing its budget deficit to ensure it is sustainable over the medium term, we believe the current priority is to sustain growth,” said Kenanga Research here, today.

Therefore, tax collected from fuel consumption would likely be rechanneled into more productive sectors such as improving public transport and education as well as boosting construction activities, it added. — Bernama

 

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