KUALA LUMPUR – Economic and financial observers have hailed Prime Minister Datuk Seri Anwar Ibrahim’s Budget 2023 announcement as a “strong start” that will help address the cost of living, especially for those in the B40 and M40 groups, while reviving the nation’s economy.
Datuk Sulaiman Mohd Tahir, the group chief executive of AMMB Holdings Bhd, said the proposed budget will help improve domestic economic prospects given the higher allocation of RM97 billion for development expenditure.
He said in tandem, the fiscal deficit is projected to narrow to 5.0% of the country’s gross domestic product, which demonstrates the government’s financial prudence in managing the economy.
“At AmBank, small and medium enterprises (SMEs) are the bedrock of our customer base and we are encouraged by the government’s efforts to support this crucial pillar of our economy – specifically as a result of the RM10 billion loan funds to be provided by Bank Negara Malaysia to ease the financial burden of SMEs as well as Syarikat Jaminan Pembiayaan Perniagaan to provide a guarantee of up to RM20 billion, focusing on sectors such as high technology, agriculture, and manufacturing,” Sulaiman said in a statement.
“This will certainly empower local SMEs.”
Sulaiman also lauded the government’s call to strengthen Islamic financing, which he believes would bode well for Malaysia as an Islamic financing hub.
“On this note, AmIslamic looks forward to building on this momentum,” he said.
“The forward-thinking aspirations of the budget – particularly with regard to ESG (environmental, social, and corporate governance) in the form of loan funds of up to RM2 billion to support sustainable technology for start-up companies and promoting SMEs towards embracing low-carbon practices – demonstrate the government’s tangible commitment to ESG and we hope that SMEs and GLCs (government-linked companies) build on this positive trajectory.”
Putra Business School (PBS) economic analyst Assoc Prof Ahmed Razman Abdul Latiff hailed the government’s move to eradicate hardcore poverty, saying the budget showed that the administration was indeed concerned with the people’s well-being.
He also said the RM99 billion for development spending is the largest allocation ever and would complement the initiatives by previous administrations.
“Development spending for infrastructure construction has a long-term impact in generating economic growth because it involves infrastructure development,” he told The Vibes’ Bahasa Malaysia sister portal Getaran.
Although the country and the world will be facing a global economic recession that may hamper growth, domestic spending will continue.”
Asked about the government’s decision not to implement the goods and services tax (GST), Razman said the government would not be at a loss as there are various alternatives to increase the national income without burdening the people.
Even if GST is not implemented, additional revenue can be generated through other forms of taxation, such as the introduction of a luxury goods tax and the possibility of taxing capital gains.”
Abu Sofian Yaacob, another PBS economist, said the budget will help cushion the rising cost of living for vulnerable groups.
He said the administration’s move to consolidate GLCs and government-linked investment companies will be the driving force behind the country’s economic recovery.
“I think that is important because we have to implement the transformation of government agencies, not only physically but in terms of mindset and attitude.”
Investment firm MIDF Research, a wholly owned subsidiary of Permodalan Nasional Bhd, said the budget aims to safeguard the continued well-being of the vulnerable segments of society – in light of the high cost of living – and spur income growth.
As evidence of this, it cited measures on food security, public-private partnerships on technical and vocational education and training, and personal income tax reductions of two percentage points for those with taxable income between RM50,000 to RM100,000.
“MIDF Research believes that the efforts to increase high-impact investments and foreign direct investments via various incentives – such as relocation incentives to attract affected electrical and electronic sector investors and incentives for the aerospace industry – are commendable.
Measures focusing on science, technology, and innovation can be seen as necessary to ensure that Malaysia’s economy remains competitive,” it said.
It added that measures to strengthen the country’s ESG agenda – such as promoting green practices in business, including providing funding for SMEs to adopt low-carbon practices and the Green Tech Funding Scheme – is to ensure that Malaysia’s economic growth remains sustainable for future generations.
Meanwhile, Khazanah Nasional Bhd managing director Datuk Amirul Feisal Wan Zahir said the budget corresponds with the government’s efforts in driving Malaysia’s economy by boosting investments and attracting foreign inflows into the country.
He said it would also ease the burden from the high cost of living, enhance the people’s well-being, and improve public infrastructure, in line with the “Malaysia Madani” aspiration.
“Khazanah and our investee companies are ready to deliver on the various initiatives as announced in Budget 2023 to help steer the nation towards a positive future for all Malaysians, in tandem with Khazanah’s long-term strategy of advancing Malaysia.” – The Vibes, February 25, 2023
Additional reporting by Aiman Sadiq
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