He said the Fiscal Policy Committee held the view that the revised deficit estimate of 6.5% of Gross Domestic Product would be achieved and the finance ministry would continue to monitor this performance and development.

“Based on the outlook for a better economic recovery for 2022 as well as federal budget measures, the fiscal deficit is targeted to be reduced to 6% of GDP,” he said in a press statement after chairing the committee’s meeting today.

Ismail said institutional reform initiatives were key policy measures in supporting this effort.

In the medium term, the government remains committed to the deficit target as outlined under the 12th Malaysia Plan, of 3.5% of GDP in 2025.

The committee had examined several proposals that will improve the country’s financial position and fiscal sustainability once the economy returns to the growth trajectory before the Covid-19 pandemic, he said.

The sustainable recovery agenda will be aligned with the initiatives under the 12MP, and will be focused on the development of high technology, innovation and sustainability in sectors with high growth potential.