Current economic situation far stronger than '97 financial crisis: PM

PUTRAJAYA: Prime Minister Datuk Seri Najib Abdul Razak said today the current economic situation in the country was far stronger than the Asian financial crisis in 1997 because of the government’s planning.
He said the reason for this was because reforms had decreased the government’s fiscal deficit every year since 2009.
“Our situation is stronger than the Asian financial crisis in 1997, this is because we have planned and learned from the adverse effects of the crisis,” he said.
“When we started the Economic Transformation Programme in 2009 our fiscal deficit decreased by 6.7% each year since then,” he added.
Najib added that because of factors that is out of the government’s control, this year’s fiscal deficit may only be 3.2%.
He said that external global factors are the main reason for the world market turmoil and no country in the world has been exempt from the effects of this.
He added that economic reform has to go on in the country however unpopular it may be.
“Even though it (reform) is unpopular and painful, reform has to continue and eventually people will realise that these reforms will give us latitude in times of uncertainty,” he said.
“Imagine if our deficit stood at 6.7%, our space would be limited,” he said at the National Treasury staff excellence awards here.
He added that if the petrol subsidy was still in implementation, the government would have to fork out an annual RM20 billion which would increase the governments financial burden.
He also spoke about the Goods and Services Tax (GST), saying that although unpopular now, it will be returned to the public.
“There would have been bigger financial strain on the government if we didn’t implement the GST, although it is unpopular, the GST’s benefits will be given back to the people,” he said, adding that these benefits will be seen in the nation’s budget.
He also added that the government is currently focusing in on the controllable factors in the nation’s economy to ensure stability.
“Hopefully this situation can be under control as soon as possible,” he added.