KUALA LUMPUR: The upcoming 2019 Budget is exceptionally important this time around to provide clarity and direction for the country, said the World Bank lead economist for Malaysia Richard Record.
“Budgets are always important but this one is even more so as it will be an important opportunity to set the tone not only for the next fiscal year but also the years beyond.
“It’s important on how the government will try to balance between the challenges of fiscal consolidation and growth as well as debt.
“Most importantly, this is the chance to send the signal to investors and private investors about the reform and growth opportunities that Malaysia has,” Record said.
Speaking to reporters at the bank’s East Asia and Pacific Economic Update event here today, Record said Malaysia should diversy its economy to have different sources of growth.
As a highly open economy, Malaysia would continue to face substantial risks relating to uncertainty in the external environment, he added.
“Heightened financial market volatility either triggered by shifting monetary policy expectations in advanced economies or crisis in other regions could spread across emerging economies including Malaysia, through capital outflows and pressures on exchange rates.
“Another key risk relates to the escalation in protectionist tendencies and trade tensions in some major economies which could have an adverse impact on Malaysia, given its high level of integration with global markets and its dependence on global value chains as a source of growth.”