The 2017 Budget will far-fetched have ‘huge give-aways’ as the administration looks to keep up monetary judiciousness to maintain a strategic distance from any danger of sovereign viewpoint or evaluations downsize, as per United Overseas Bank (Malaysia) Bhd (UOB Malaysia).
UOB Malaysia financial expert Julia Goh said that the main give-aways in the Budget will be focused on the last 40% families(B40), middle 40% families (M40), and government workers.
“These portions have a higher tendency to go through with a positive effect on utilisation and development”.
UOB Malaysia anticipates that the administration will proceed with the BR1M instalments, assist in tax allowances for the middle-income groups such as personal allowances, medical allowances, aged people care, child care and children’s education. “The administration has disclosed that it is not willing to change the GST rate of 6%. We are not willing to impose GST on the petroleum products to give relief to the consumers, however, the allowances from this measure are expected to be RM2-3 billion,” Goh said.
“We expect that the Government will concentrate on the areas like digital economy, tourism, property, housing projects, tax allowances for middle-income families, transportation, increased BR1M cash vouchers,” the report said.
The subject of Budget 2017 is “Stimulating Growth, Upgrading Well-being of Rakyat, Assuring financial vigilance” to be discussed in Parliament on 21 October. UOB Malaysia forecasts financial deficit of 3.1% of GDP in 2017 (estimated -3.1% in 2016). This follows the seven-year reduction of the financial deficit. “Advertise expects an Election spending plan with huge give-aways. Given rigid government incomes in the midst of low oil costs and sluggish growth, any growth plans must be finished with the monetary discipline to keep away from the risk of appraisals downsizing or sovereign outlook.
UOB Malaysia anticipates that the administration will target genuine GDP development between 4-5% (as compared to 4-4.5% for the last year) however global recession and various occasion dangers could drop the growth towards the bottom of the range. “Our GDP estimate is 4.5% for 2017 (as compared to the actual 4.2% in 2016),” she included.