On today’s Keluar Sekejap podcast episode, the former minister also said the government should not be too aggressive in cutting the fiscal deficit.

“In a situation where the government cannot comply with the target, regardless of external factors, the government will lose credibility. In the investment world, loss of credibility is a big issue,” he said.

Khairy also said the government must act to counter the expected increase in the country’s debt service, which is concerning.

“I am a bit worried about the increase in our debt service. Our debt service percentage to gross domestic product (GDP) is usually 15%. Next year, it is expected to increase to 15.2%.”

The former Rembau MP said the government has to ensure that the nominal GDP would increase, which would also help with fiscal discipline.

During the recent budget announcement, Prime Minister Anwar Ibrahim said the service charge on debt is expected to account for RM46.1 billion, or 15.2%, of the revenue in 2024.

Separately, Khairy said the recent budget announcement is more sensible than flashy.

He said the budget was not considered a populist one as it did not have anything that could be described as “sweets”, despite the increase in cash aid such as Sumbangan Tunai Rahmah.

“I think it is not a populist budget because we are out of the election cycle and the pandemic.

“The prime minister does not have much political consideration when it comes to the budget as the state elections are over,” he said.

However, Khairy said the budget missed an opportunity to reintroduce the goods and services tax (GST).

He said the government could reduce the GST’s regressiveness by having more items in the excluded list.