Malaysia's 2014 Budget aims to boost economy, curb debt

Malaysian Prime Minister Najib Razak tabled on Friday the 2014 Budget amounting to RM264.2 billion, aimed at invigorating economic activity and ensuring the well-being of the people towards achieving a developed nation status.

KUALA LUMPUR: Malaysian Prime Minister Najib Razak tabled Friday the 2014 Budget amounting to RM264.2 billion, aimed at invigorating economic activity, strengthening fiscal management, inculcating excellence in human capital, intensifying urban and rural development and ensuring the well-being of the people towards achieving a developed nation status.

When tabling the budget themed "Strengthening Economic Resilience, Accelerating Transformation and Fulfilling Promises" in Dewan Rakyat on Friday, Najib who is also the Finance Minister said RM217.7 billion was allocated for operating expenditure and RM46 billion for development.

The operating expenditure includes RM63.6 billion for emoluments, RM36.6 billion for supplies and services, RM114.5 billion for fixed charges and grants, RM1.4 billion for purchase of assets and the remaining RM1.5 billion for other expenditure.

From the Development Expenditure of RM46.5 billion, a sum of RM29 billion was allocated to the economic sector, a sum of RM10.5 billion was allocated for the social sector, including education, training, health, welfare, housing, community development; RM3.9 billion for the security sector; RM1.1 billion for general administration and RM2 billion for contingencies.

Najib said the government's revenue collection is estimated at RM224.1 billion, an increase of RM4 billion from 2013.

"Taking into account the estimated revenue and expenditure, the government's fiscal deficit will further drop from 4 per cent of GDP in 2013 to 3.5 per cent in 2014. This clearly indicates the government's commitment towards fiscal consolidation to further strengthen the financial position of the nation," he said.

Taking stock of the current international and domestic economic environment, Najib also underlined five thrusts which will be the basis of the 2014 Budget, namely invigorating economic activity, strengthening fiscal management, inculcating excellence in human capital, intensifying urban and rural development, and ensuring the well-being of the people.

This is the fifth budget tabled by Najib since 2009 -- formulated to ensure that the economy continues to expand at a strong pace and to reduce the fiscal deficit -- with the overall objective of prospering the nation and the people.

Najib said the global economy is expected to grow at a slower pace of 2.9 per cent in 2013 and Malaysia would not be spared from the modest growth.

"Nevertheless, the country's strong economic fundamentals and accommodative monetary policy will enable us to grow at a sustainable pace. In fact, the economy grew by 4.2 per cent in the first half of 2013," he said.

For the whole of 2013, the domestic economy is expected to expand between 5.4 per cent and 5 per cent, he said.

He said the growth was supported by private investment, increasing 16.2 per cent to an estimated RM165 billion and in addition, private and public consumption are expected to grow 7.4 per cent and 7.3 per cent respectively, mainly supported by strong domestic economic activity.

Najib said next year, in tandem with an improved global economic outlook, the domestic economy is projected to grow at a stronger pace of 5 per cent to 5.5 per cent and that this growth would be driven by private investment expanding 12.7 per cent and private consumption at 6.2 per cent.

"International reserves remained strong at RM444.9 billion as of October 14, 2013 and sufficient to finance 9.7 months of retained imports and is 3.9 times the short-term external debt," he said.

The unemployment rate is estimated at 3.1 per cent while the inflation rate will remain low between two per cent and three per cent.

Najib said the per capita income for 2014 is expected to reach RM34,126 compared with RM24,879 in 2009 -- an increase of 37 per cent over six years -- and that will boost Malaysia's chances of achieving developed nation status much earlier and achieve the targeted per capita income of RM46,500 or US$15,000 by 2020.

"In short we are on the right track to achieve the developed nation status much earlier than 2020. The government will also continue to provide a conducive environment to attract more domestic and foreign investment," he said.

In 2014, private investment is expected to increase further to RM189 billion or 17.9 per cent of GDP, particularly in oil and gas, textile industry, transport equipment and real estate development, he added.

Public investment is estimated to reach RM106 billion whereby projects to be implemented include the construction of the 316 kilometre West Coast Expressway from Banting to Taiping, as well as double tracking projects from Ipoh to Padang Besar and later from Gemas to Johor Bahru.

Najib said the government will allocate RM1.6 billion for development in the five regional corridors, namely the agropolitan project and oil palm-based industries in the Sabah Development Corridor as well as Samalaju Industrial Park and a halal hub in the Sarawak Regional Corridor.

He said the service sector is the key contributor to economic growth and has a huge potential for further development because the sector's contribution to GDP has increased from 49.3 per cent in 2000 to 55 percent in 2013.

The government will therefore launch the Services Sector Blueprint next year, which outlines strategies and measures, as well as identifying the following potential subsectors to be developed.

Najib said the government would also formulate the National Aviation Policy to outline measures to strengthen the ecosystem and services network in the aviation industry.

For the period January to July 2013, passenger traffic at airports nationwide increased to 43.9 million from 38.6 million passengers during the same period in 2012.

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Malaysia's 2014 Budget aims to boost economy, curb debt

Malaysian Prime Minister Najib Razak tabled on Friday the 2014 Budget amounting to RM264.2 billion, aimed at invigorating economic activity and ensuring the well-being of the people towards achieving a developed nation status.

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