Budget 2016 to strengthen nation's economic resilience

KUALA LUMPUR: The Budget 2016 will continue to promote the people's economy by strengthening the nation's economic resilience towards the ultimate objective of prospering the nation and enhancing the well-being of the rakyat (people), despite the external environment which remains volatile and uncertain.
According to the Economic Report 2015/2016, various initiatives under the Budget 2016 supported by strong economic fundamentals will help the nation weather challenges in the external environment, as well as enable the economy to register steady growth next year.
"The Budget 2016, being the first year of the 11th Malaysia Plan (11MP), will emphasise on value innovation, particularly high impact at low costs and rapid execution," says the report, stating that Malaysia's external position is forecast to remain positive in 2016, supported by better prospects for global growth and trade.

The Malaysian economy is expected to remain steady in 2016, with real Gross Domestic Product (GDP) growth at between 4 and 5% led by domestic demand.

Private sector expenditure will remain the main driver of growth, with private consumption and investment expected to grow by 6.4% and 6.7%, respectively.
"The government's expenditure is forecast to expand at a moderate pace, in line with efforts to strengthen the fiscal position. On the supply side, growth is expected to be broad-based with all the sectors registering positive growth," says the report.
The nominal Gross National Income (GNI) per capita is also expected to increase by 5.6% from RM36,397 in 2015 to RM38,438 in 2016, with total investment surpassing savings in which savings-investment gap is expected to narrow between 0.5 and 1.5% of GNI.
According to the report, the economy will continue to operate under conditions of full employment with the unemployment rate remaining below 4%.
Despite the weak ringgit, inflation is expected to remain between 2 and 3%, attributed to low oil prices and the GST's waning impact.
The fiscal deficit is expected to further decline to 3.1% of GDP in 2016 while the Federal Government debt level will remain manageable within the prudent limit of 55% of GDP.
Meanwhile, the report revealed the Malaysian economy grew by 5.3% in the first half of 2015, driven by resilient domestic demand. The current account posted a surplus of RM17.6 billion or 3.2% of GNI in the first half of the year. – Bernama