The quadruple factors of slowing economic growth, rising borrowing costs, negative downgrades of sovereign rating and the possible breach of debt ceiling will be the ultimate economic mess that Malaysian will face if this trend continues……PAS Research Centre.
We’re heading towards economic mess, warns PAS man
PAS’ Dzulkefly Ahmad says additional supplementary bills showed that the government had no political will to conduct fiscal reforms which will result in increasing the national debt.
PETALING JAYA: The trend of passing supplementary budget bills on non-priority operating expenditure will eventually lead Malaysia to an economic mess, said PAS Research Centre director Dzulkefly Ahmad.
Dzulkefly said the tabling of additional supplementary bills showed that the government had no political will to conduct fiscal reforms.
“It raises concern over the government’s ability to trim the national debt which is at a critical level,” said the former Kuala Selangor MP in a press statement.
He said this in response to Deputy Finance Minister Ahmad Maslan who defended the RM15 billion Supplementary Supply Bill tabled earlier this week.
Ahmad had told the Dewan Rakyat that the payment for subsidies, emoluments and other “urgent items” required RM14.13 billion and an additional RM888.5 million was required for other expenditure.
He said general services in the Treasury alone would be receiving RM11.8 billion of the added allocation.
In July, a supplementary bill of RM12 billion was approved for the year 2012. Now, another RM15 billion is being tabled just a few weeks before the Budget 2014 announcement.
Dzulkefly said the proposed supplementary budget was not fiscally prudent.
“It can spiral down the market especially when there is a perceived backtrack from early fiscal pledge and warning from global rating agencies,” he said.
The PAS leader is expecting the supplementary budget to increase up to 5% from the approved 2013 budget of RM251 billion. It would also exceed 1.5% of the 2013 gross domestic product (GDP).
Bank Negara maintains that the GDP growth for the year at 5% to 6% but UBS Investment Bank said last month that Malaysia’s GDP was unlikely to surpass 5% in 2013 due to a weak 4.1% growth in the first quarter of the year.
He said the additional supplementary RM15 billion would result in the downgrading of Malaysia’s credit rating which could dampen investment in the equity and bond markets.
“It can retard economic growth given the higher bond yield from credit downgrading and falling capital market,” Dzulkefly added.