Economist: Govt sets realistic deficit target of 2.8%

KUALA LUMPUR: The target of reducing the government's fiscal deficit to 2.8% in 2018 from three percent this year is realistic based on the economic growth forecast of between five and 5.5% this year, an economist said.
MIDF Amanah Investment Bank Chief Economist Dr Kamaruddin Mohd Nor said the gross domestic product (GDP) increase would result in higher government's revenue and contribute to reducing fiscal deficit.
"If we were to look back at the trend since 2009, the government's deficit was almost seven percent then, but it reduced every year every time the prime minister tabled the budget.
"So, the projected reduction of fiscal deficit to 2.8% in 2018 from three percent this year is a realistic figure," he told reporters at the Post-Budget Dialogue here today.
Kamaruddin, who is a panellist at the dialogue, said the government also set a realistic target on oil prices by projecting the average price at US$52 per barrel next year despite the current world oil price hovering at US$59 per barrel.
"If we were to look at the oil price trend based on market demand ... we are confident that the government's projection on the average oil price for 2018 is realistic and will contribute to national income," he said.
He said the budget presented was inclusive in nature with the focus on target groups especially the those in the B40 (bottom 40%) household group made up of farmers and Felda settlers, as well as traders and students. — Bernama