Off the wire
• Nepal proposes taskforce to look into bilateral treaties, agreements amid strained ties with India  • Indian PM cracks whip on non-performing bureaucrats  • Living Nanjing Massacre survivors down to 133  • Cyclone alert issued for Western Australia's Pilbara region  • Afghan forces seize Taliban militants' weapons cache  • Resale prices of Singapore's private homes down 0.4 pct in December: SRPI  • China's highest heating project to be implemented in Tibet  • Celebration of William Shakespeare to reach millions across China  • Egyptian F-16 crashes, crew die: spokesman  • Xi congratulates Nguyen Phu Trong on re-election as Vietnam's communist party chief  
You are here: 　 Home

Malaysia cuts growth forecast, announces budget recalibration amid falling oil prices

Xinhua, January 28, 2016 Adjust font size:

The Malaysian government trimmed its forecast on economic growth for 2016 on Thursday but Prime Minister Najib Razak stressed his country remains on a stable economic basis.

In announcing the recalibration of the 2016 budget, Najib said his government decided to revise the 2016 forecast of economy growth to between 4 percent and 4.5 percent based on the assumption of oil prices at 30 U.S. dollars to 35 U.S. dollars per barrel.

The original budget was based on the assumption of oil prices at 48 U.S. dollars per barrel and the government expected economy to expand by 4 percent to 5 percent this year.

The falling oil prices have a significant effect on Malaysia's revenue, Najib said. Local media reported that a 1 U.S. dollar drop in crude oil prices would cut 300 million ringgit (71.4 million U.S. dollars) from the government coffer.

Najib announced a series of measures in the revised budget, such as more prudent government spending, boosting the tourism sectors, among others. But he also committed to improving public welfare and continuing investment in necessary projects like public transportation.

The prime minister said his government would retain the target of a fiscal deficit target of 3.1 percent to GDP, while keeping the national debt level not exceed the prudent level of 55 percent to GDP.

The government will neither impose capital control nor peg the ringgit, which lost more than 20 percent of its value to the U.S. dollars last year.

Najib said Malaysia was not alone in facing the economic challenges, stressing that his country "is neither in economic nor technical recession".

"The domestic economy continues to remain strong and resilient, capable of facing global economic uncertainties," he added.

Meanwhile, Najib said the Malaysian ringgit was expected to better reflect the strength of the economic fundamentals when global financial markets stabilize and oil prices recover to more reasonable levels. Endit