The government would prioritise helping the middle class and micro, small, and medium-sized enterprises in the 2024 Budget in order to reduce the burden of rising living expenses.
The national budget would be in accordance with medium- to long-term policies like the Madani Economy, the mid-term review of the 12th Malaysia Plan (12MP), the New Industrial Master Plan (NIMP), and the National Energy Transition Roadmap, according to analysts, in order to accomplish this.
“The 2024 Budget is expected to build upon the foundation of fiscal discipline laid by the Malaysia Madani Budget 2023, aiming to provide a clearer roadmap for fiscal reforms and the nation’s financial landscape,” said Public Investment Bank Bhd (PublicInvest).
“Given the imperatives of investment attraction, socio-economic restructuring and fiscal resilience, we believe that a robust probability exists for fiscal consolidation, underscored by a deliberate reallocation of resources towards bolstering the welfare of vulnerable households and sectors.”
PublicInvest thinks the government has a rare opportunity to define comprehensive tax policies and robust budgetary measures within the framework of the 2024 Budget.
The firm claimed that the government’s adherence to domestic direct investment as the cornerstone of the overall investment programme for the country is unwavering.
“It is imperative to maintain a robust support system for MSMEs, enabling their greater integration into the global value chain.”This is consistent with the 12MP’s midterm review’s goals, which include raising MSMEs’ GDP shares to 41% and exports to 15% by 2025. Beyond these economic goals, this strategic strategy will propel Malaysia from its current 36th position to among the top 20 nations in the worldwide innovation index.
According to CGS-CIMB Research, the budget will prioritise allocating funding to the most disadvantaged households and sectors while focusing on fiscal restraint.
It appears that the Madani framework, which has been the subject of recent announcements like the NIMP and 12MP mid-term review, will be turned into workable policies.
We believe that the political risk has greatly decreased now that the state elections have passed, allowing the government to concentrate on economic issues. In light of this, the firm predicted that the government might aim for a fiscal deficit of 4.3% of GDP rather than 5% this year.
