He said the government had also lowered its current account deficit to RM1.1 billion in the January-May 2019 period, a reduction of 94% or RM16 billion from the RM17.1 billion deficit in the same period last year.

“Fiscal discipline has been instituted through a combination of tighter controls over operating expenditure in the form of wider application of open competitive tenders, and the implementation of zero-based budgeting,” he said in a statement today.

He added that the open competitive tenders and zero-based budgeting had also pushed up the government’s development expenditure by 13% or RM2.4 billion year-on-year to RM20.3 billion in January-May 2019.

“The successful fiscal consolidation was among the reasons for Fitch Ratings’ affirmation of Malaysia’s sovereign credit rating at A- with a stable outlook on July 18, 2019, which follows similar confirmation by S&P global ratings on July 3, 2019.

“Nevertheless, the government is mindful of its subsidy bill, and will continue to manage its expenses prudently,” he said.

Lim said, as stated in the 2019 Budget, the government planned to spend RM259.9 billion for operational purposes this year.

The RM106.5 billion worth of operational spending for the January-May 2019 period represented 41% of the total budgeted 2019 operating expenditure, he said.

“Based on the current fiscal performance, the government is positive of achieving its fiscal deficit target of 3.4% of gross domestic product (GDP), while keeping its current account balance in surplus for 2019,” he said.

He added that if there was no trade war between China and the United States, two of Malaysia’s largest trade partners, the government could be confident of achieving the targeted 3% fiscal deficit of GDP for 2020.

Overall, Lim said the government was confident that the economy would expand sustainably this year and in 2020, and it was on track to fully restore the fiscal health by 2021.