PETALING JAYA: Apart from addressing the needs of the poor, Budget 2022 must focus on economic recovery, an objective the current budget is not likely to achieve.
The target under Budget 2021 was to register a growth rate of 6.5% to 7%, once deemed achievable by Bank Negara Malaysia, the World Bank and the International Monetary Fund.
However, as economists Dr Yeah Kim Leng and Dr Barjoyai Bardai said, this has been derailed by a surge in Covid-19 cases since last month.
Yeah, who is professor of economics at Sunway University Business School, said the failure to achieve the economic growth target under Budget 2021 is solely due to the fact that the government has had to direct more funds to address the pandemic.
“It is even more pertinent now that our focus is on accelerating economic growth under Budget 2022. It has to be an expansionary budget that also takes into account the need to protect lives and livelihood,” he told theSun.
The government must ensure that growth is sustainable in the long term, with emphasis on digitalisation, he said.
Digitalisation will be one of the means to alleviate economic hardship and promote high growth, especially for people in the low income group. The budget should focus on creating employment for the group, Yeah added.
Work on drafting Budget 2022 began last month and is expected to be completed by August.
In a “live” interview on RTM and Bernama TV on Sunday, Prime Minister Tan Sri Muhyiddin Yassin said the focus of next year’s budget will be on helping the people tackle the effects of the pandemic.
“If we have the money, we will use hundreds of billions (of ringgit) to assist the people.”
Yeah said the budget’s emphasis will also depend very much on how well Malaysia does in the Covid war and whether it can break the infection chain.
“If there is a clear indication that the chain has been broken, then the focus should be on expansion that will lead to economic growth.”
He said another area not to be left out is opportunities for green growth.
“This is essential to help Malaysia reduce its carbon footprint and attract investments from green technology companies. The world is already turning to green technology and we have a unique opportunity of cashing in by getting green tech companies to invest here.”
He said efforts must also be made to sustain export growth.
Barjoyai acknowledged that the worsening Covid-19 situation had likely caused Budget 2021 to miss some of its targets.
“The government has been forced to direct a lot of money to deal with the surge in infections, thus depleting funds for economic growth,” he said.
Politics will also play a role in determining the direction of the next budget, he added.
“A factor to consider is whether Perikatan Nasional will still be in power after the Emergency ends on Aug 1. This will depend on whether Umno pulls out of the coalition government to force new elections.”
