Finance Minister Lim Guan Eng also announced a review of “non-essential operating expenditure” such as consulting services, refurbishments, computer upgrade and promotional events.

“In the longer term, the government would save billions of ringgit when these projects were to be re-tendered or scrapped altogether,” he said today.

Lim also said that the projected fiscal deficit is set to increase to RM40.1 billion from RM39.8 billion which would maintain the Federal Government budget deficit at 2.8% of the GDP.

“In addition, the government’s current balance will also remain positive.”

He also said Putrajaya is expected to earn an estimated RM5.4 billion in revenue for the increase of oil prices; an estimated RM5 billion in dividends from GLCs, such as Khazanah, Petronas and Bank Negara and an estimated RM4 billion from the implementation of the sales and services tax in September.

Meanwhile, Reuters reported Lim as saying that Malaysia had paid a RM143.75 million bond coupon payment of troubled state fund 1Malaysia Development Berhad (1MDB) that was due on Wednesday.

“We have settled that … I have signed it very reluctantly, and the payment has been made,” he said.

The new Malaysian government that took charge this month has said that 1MDB is unable to repay its debts but the government would honour all commitments for the state fund.