KUALA LUMPUR: Standard Chartered Bank Malaysia Bhd has described the 2017 Budget as a people-centric budget aimed at increasing the rakyat's disposable income.
“Measures tailored for various groups such as B40, M40, fresh graduates and first time homebuyers would certainly ease the burden of high cost of living amidst the slowing global economy," says its CEO Mahendra Gursahani.
Domestic consumption and private investments are needed to support GDP growth, he said, and he was encouraged to see the pro-business strategies announced in the Budget.
"The RM2.1 billion allocation to the five economic corridors will be a positive for financial services as we support and participate in the country’s infrastructure development," he said, adding that it was good to see that small and mid-cap companies are given attention in this Budget, opening up participation in the capital markets to more players.
Gursahani is looking forward to 2017 as Start-ups and SME Promotion Year.
"SMEs are the backbone of the economy, contributing one third of the country’s GDP, and Standard Chartered will continue to help local enterprises seeking to internationalise their businesses."
UOB Bank economist Julia Goh, meanwhile described the 2017 Budget as a tough balancing act between supporting growth, addressing structural issues and maintaining fiscal prudence.
“The government’s projections for 2017 appear a tad optimistic given subdued global growth outlook and multiple external risks that could tilt Malaysia’s growth towards the lower end of the government’s forecast,"she said, in reference to the government's projected 4 to 5 per cent growth for next year.
The overall expenditure budget was slightly higher for 2017.
Private consumption, she said, will be held up with the government’s larger giveaways for the lower-and middle income groups (higher BR1M aid for 7 million totaling RM6.8 billion) while infrastructure projects will support investment activity.
The fiscal deficit is projected to narrow further to 3.0 per cent of GDP in 2017 (3.1 per cent in 2016) based on higher oil price assumption of US$45 for 2017 (versus US$40 for 2016).
Revenue is budgeted to expand 3.4 per cent to RM219.7 billion in 2017, which will cover operating expenditure (RM214.8 billion) and deliver a lower operating surplus of RM4.9 billion.
Development expenditure is budgeted to rise 2.2 per cent to RM46 billion from RM45 billion in 2016.
"Despite the challenging global landscape, the government has stayed focus on fiscal consolidation as next year marks the eight year of narrower fiscal deficit since Malaysia started recording shortfalls back in 1998.
"The gradual pace of deficit reduction while ensuring sufficient allocations for priority development to support growth will help to lower economic vulnerabilities. "