Fitch Solutions lowers Budget 2023 deficit forecast to 4.9%

Fitch Solutions lowers Budget 2023 deficit forecast to 4.9%

Fitch Solutions Group says its forecast aligns somewhat with the government’s fiscal projections.

The Anwar Ibrahim-led government projects a budget deficit of 5% of GDP for 2023, a narrower shortfall from a revised estimate of 5.6% in 2022. (Bernama pic)
PETALING JAYA:
Fitch Solutions Group (FSG) has lowered Malaysia’s 2023 budget deficit forecast as a share of Gross Domestic Product (GDP) to 4.9% from 5.3% previously, which it said is “somewhat aligned” with the government’s fiscal projections.

In its country risk & industry research report today, FSG said it expected the country’s 2023 revenue to come in much higher than before, after revenue collection surged by 25.9% in 2022.

“On Feb 24, Prime Minister and finance minister Datuk Seri Anwar Ibrahim unveiled the country’s 2023 budget of RM386.1 billion. This is more expansionary than the RM372.3 billion budget proposed by the former government, which was never passed in Parliament as the lower house was dissolved to make way for (the) general elections.

“Overall, the Anwar(-led) government projects a budget deficit of 5% of GDP for 2023, marking a narrower shortfall from a revised estimate of 5.6% in 2022,” it said.

FSG said the budget is expansionary overall, with the government announcing a slew of measures to lower the cost of living amid high inflation as well as more progressive taxes.

“Broadly speaking, we have aligned our revenue and expenditure forecasts with the government’s projections for now,” it added.

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