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Budget deficit to be revised upwards

KUALA LUMPUR, 29 Jan 2009: Malaysia will revise upwards its projected budget deficit for this year, following the introduction of the second stimulus package to be announced soon, said Deputy Prime Minister Datuk Seri Najib Razak.

The quantum of increase in the fiscal deficit would depend on how much the government is going to pump-prime the economy via the second package being planned by the government, he said.

“It (fiscal deficit) depends on the fiscal pump-priming that we are going to do,” he added.

He said at the moment the fiscal deficit is projected at 4.8% based on the RM7 billion stimulus package announced last year.

The government is mindful of the need for the fiscal deficit to not be “too high”, said Najib, who is also the Finance Minister.

Najib, who was speaking to reporters after launching the New Peugeot 308 here today, remained tight-lipped on when the government would announce the second package.

“I am working on it. I will let you know,” he said, adding that the budget deficit figure would be announced when he presents the second stimulus package.

Providing an update on the first stimulus package, Najib said more than 70% of the RM7 billion, designed to reinforce and stimulate the economy, had been disbursed.

He said 2,224 education projects valued at RM200 million for upgrading, rehabilitation and maintenance and 2,443 health-related projects costing RM200 million, had been awarded.

These projects would be implemented throughout the country, he added.

Najib said the relevant ministries and agencies had been directed to ensure that projects identified for implementation under the stimulus package are implemented as soon as possible and completed this year.

He also said procedures were being streamlined to ensure a speedy implementation of projects designed for high impact and a high multiplier effect to stimulate growth, enhance resilience of the economy while improving the quality of life and human capital development.

“This is because, given the uncertainties in the global economic environment, swiftness in acting to implement the programmes is very critical,” he said.

According to Najib, the head of the Project Monitoring Unit (PMU) Datuk Ir Mohamad Othman Zainal Azim would report directly to him on the progress, on a regular basis.

The PMU will monitor and coordinate implementation of critical and high impact projects to ensure efficient and effective implementation, he explained.

Najib noted that since the construction sector had a high multiplier, RM5 billion of the RM7 billion package had been allocated for small construction and development projects.

These include RM1.2 billion for building and maintenance of low-cost houses and the rest for infrastructure, schools, police stations and army quarters, he said.

Under the package more than 20,000 houses would be built, including 6,500 houses by Syarikat Perumahan Negara Bhd.

“The government is monitoring the global and domestic economic situation very closely. In the face of further deterioration in the global economy, additional pre-emptive measures are being considered.” — Bernama


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