Austerity measures just temporary: Tun M

KUALA LUMPUR: The austerity measures undertaken by the government during the 2018-2020 period, which could affect economic growth, is only temporary in nature, Tun Dr Mahathir Mohamad said.
"I am confident that with the eradication of leakages and the implementation of development projects, it will contribute to the economic growth and well-being of the people," the Prime Minister said when presenting a motion on the Mid-Term Review of the 11th Malaysia Plan (2016-2020) at the Dewan Rakyat today.
Mahathir said the former Barisan Nasional government had spent extravagantly and not prudently.
"Now we need to spend carefully. The Federal Government's financial position needs to be strengthened," he said, adding that non-transparent financial practices would be discontinued and leakages at all levels would be plucked.
He said these measures included reviewing unsustainable project implementation and cancelling low-priority projects.
However, high-impact socio-economic development projects and those that improve the well-being of the people will continue, he added.
The Prime Minister said the economy was expected to grow between 4.5% to 5.5% per year during the 2018-2020 period, supported by domestic and external demand, particularly strong demand from Asian countries.
"Private demand is expected to spearhead economic growth, with private investment expected to grow by 5.7% per annum.
"With improved governance and revenue increase, the government is confident the fiscal position could be recovered by the end of 2020," he said.
Mahathir said the government targeted a fiscal deficit of 3.0% to the Gross Domestic Product by 2020.
He said among proactive measures taken were to delay the implementation of the High-Speed Rail project and the government would ensure that the reduction in public spending would not affect the economic performance. — Bernama