PUTRAJAYA will reprioritise expenditures to meet its fall in revenue, should oil prices decline below the government’s annual average estimates, said Finance Minister Tengku Zafrul Tengku Abdul Aziz.

“The government is monitoring the development of oil prices closely,” he said in a statement today.

Oil prices have plummeted with Brent crude, the global benchmark price for oil, trading at around US$16 a barrel today.

West Texas Intermediate crude, the benchmark for US crude prices, is currently trading at below zero with sellers paying buyers to take barrels off their hands.

“Our calculation on the impact of lower oil prices have been factored into the deficit forecast of more than 4% of the gross domestic product,” Tengku Zafrul said.

“This reflects the whole year’s estimated deficit based on a certain level of oil price assumption.

“The general preoccupation with oil is understandable, given that it is closely linked to global geopolitical influences. However, what is more important is to recognise how Malaysia has a diversified economic base.”

Apart from undertaking fiscal and monetary policies to maintain the nation’s economic resiliency, Tengku Zafrul said the Finance Ministry will also be looking at structural reforms “to ensure better diversification” in Malaysia’s economy moving forward. – April 21, 2020.