THE government will embark on fiscal consolidation as part of medium- and long-term economic recovery plans as the fiscal deficit is expected to widen between 5.8% to 6% this year, Deputy Finance Minister I Abdul Rahim Bakri told the Dewan Rakyat today.

This will be nearly double the initial deficit projection of 3.2%.

The fiscal consolidation process will be done in phases once the economy recovers, he added, to ensure that the country’s debt remains at manageable levels and to reduce the need for more borrowing.

Among the initiatives will be improvements to the administration of taxes and increasing efficiency in terms of spending, he said.

Taking into account the economic stimulus package, the national debt is expected to stand at RM1.264 trillion by the end of 2020, Rahim added.

Of this, current liabilities stand at RM823.88 billion.

Government guarantees for infrastructure projects stand at RM166.9 billion and RM32.6 billion for 1Malaysia Development Bhd, he added.

Other liabilities amount to RM181.4 billion. 

“The (debt) position will be checked and detailed during the tabling of Budget 2021 on November 6, 2020,” he said. 

National revenue was projected to be at RM244.5 billion based on Brent crude oil price of US$62 (RM260.50) per barrel in Budget 2020.

However, Rahim said the Covid-19 pandemic and uncertainty in commodity prices will impact the country’s finances. 

On that note, the national revenue for 2020 is expected to be much lower based on the oil price of US$41 per barrel and expected contraction in GDP.

He was responding to Alice Lau (Lanang-PH) on the latest figures of national debt and liabilities, as well as revenue. 

Lau had also asked about the steps that will be taken towards economic recovery and to increase revenue following the Covid-19 pandemic. – August 12, 2020.