Govt is ready to increase the fiscal injections to support the economy - Finance Minister

PETALING JAYA (July 19): Malaysian government is ready to increase the fiscal space to support the economy and the people, said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.

In an interview with South China Morning Post, he said the government is not being too cautious with direct fiscal injections as the deficit was around 6.7 - 6.9% back in 2008 and 2009, the highest level ever and he believed under current conditions, the deficit will go up to 6.5 to 7%.

“Well, you have to look at it holistically. You must understand the fiscal position of the country. Today we have a deficit that is going to reach 7%. It’s also not about the size of the deficit. It’s the ability to borrow and the size of the reserves. 

So Malaysia as you know, although we are A-rated, we in terms of our fiscal reserves are smaller than many other A-rated countries. The only difference is that we have strong growth prospects,” he said.

He added that the government has tapped into other parts of the government’s ecosystem, such as Bank Negara and Employee Provident Fund for schemes that could help to support the economy and the people

“If you look at the moratorium that we have offered to Malaysians today, both private and companies, you can’t get it anywhere in the world. It is so streamlined and so focused. We have a strategy there,” he said.

Meanwhile, commenting on the job creation in the post-pandemic era, Tengku Zafrul noted that the National Employment Council was formed under the National Recovery Plan, aiming to create 500,000 jobs.

“For now, we have created nearly 300,000 jobs. But that was before the lockdown. Now because of the lockdown we have to increase the target, especially fresh graduates coming on stream and people who have lost their jobs. That is going to be key. And budget 2022, which is being formulated today, will definitely cover this aspect when it comes to unemployment,” he added.

However, he also emphasised that now is a time to rethink and resolve the structural issues in the employment market,  making sure the young graduates are well-trained for the future job market.

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