Posted on August 23, 2013, Friday
KUCHING: The upcoming updates for the Economic Transformation Programme (on August 29) and Budget 2014 (October 25) are the two key policy-related events to provide more clarity on Malaysia’s economic outlook.
According to the research team at Maybank Investment Bank Bhd (Maybank Research), the Performance Enhancement and Management Unit’s (Pemandu) update on the ETP will provide some colour on the progress and prospects of ETP-related investments.
“Meanwhile, the Budget 2014 will be the most important policy event in the second half of 2013 especially in the wake of Fitch Rating’s downgrade of the outlook on Malaysia’s sovereign credit rating to ‘negative’ from ‘stable’ on July 30, 2013, implying the risk of a lowering in the current investment-grade rating of ‘A-’ in the following 18 to 24 months,” they highlighted.
“In particular, Budget 2014 should put fiscal reforms back on track, especially in relation to the Subsidy Rationalisation Programme (SRP) that has been mothballed since mid-2011, the indefinite delay in introducing Goods and Services Tax (GST); and better control and management of government spending, procurements and projects.”
Maybank Research also said the Budget 2014 may also include possible reviews in some of the major infrastructure and investment projects to avoid the ‘bunching’ of mega projects over the next few years that could strain the government finance and the external balance, following the recent weakening of the country’s current account surplus amid the persistent fiscal deficit.
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