Govt still has fiscal space to help rakyat, businesses

Prime Minister Tan Sri Muhyiddin Yassin speaking during a virtual press conference on developments during the government's fight against the Covid-19 pandemic at his office.

PUTRAJAYA: The government still has fiscal space, though limited, to fund economic stimulus packages to continue helping the people, Tan Sri Muhyiddin Yassin said.

The prime minister said the country’s economic management, as certified by international rating agencies, was still in good shape.

“Our trade value in May 2021 increased to RM170.9 billion, our trade surplus amounted to RM13.7 billion, our current account surplus is stable, our economic resilience is stable, (and) our medium-term growth prospects and fundamentals are strong.

“The government has proven through eight economic stimulus packages that the government does not hesitate to spend money to help the rakyat, (and) assist business sustainability,” he told a special press conference here today.

Fitch Solutions Country Risk & Industry Research recently claimed that the government will not be able to fund the current stimulus package or other packages in the future due to various constraints facing the country at the moment.

The government has so far implemented eight economic stimulus packages worth more than RM530 billion, including more than RM80 billion in government fiscal injections, for the benefit over 20 million individuals and 2.4 million businesses.

The prime minister said the government’s deficit was expected to exceed the 6.0 per cent projection this year, taking into account the impact of the latest movement control order (MCO) and the enhanced MCO in Selangor.

“However, even though this deficit is large, we can push it aside for a while to ensure that the Malaysian economy recovers and the rakyat are protected.

“The growth forecast may have to be lowered slightly, but we are optimistic that when more people are vaccinated and more economic sectors can be reopened in Phase 2 and Phase 3 (of the National Recovery Plan), then our economy will rebound,” he said. – Bernama