KUALA LUMPUR -
The writing is already on the wall and easily evident in daily life in Malaysia with every progressing day that the economy is beginning to spew and sputter and it should really be a matter of time before it begins to stall and go in a downward spiral.
What Malaysians suspected and feared all along prior to the 13th GE became a stark reality when Fitch Rating’s revision of the country’s outlook was downgraded from “stable” to “negative” in late July 2013 that gave the clearest indication that international investors have run out of patience.
In response to Fitch’s downgrading, a visibly shaken Najib Tun Razak said early this month that the forthcoming Budget 2014 on Oct 25 will contain strategies to reduce Malaysia’s fiscal deficit which currently stands at 53.9 per cent of GDP as at the First Quarter of this year.
This is just a fraction below the 55 per cent level that is deemed prudent compared with 39.8 per cent just five years ago or in 2008. As a result, Najib has announced the setting up of a fiscal policy committee in a move to cut Malaysia’s budget deficit to 3 per cent by 2015 for which the prime minister’s advisers want details worked out in the coming months.
But analysts contend that Malaysia’s mounting debt burden is worrisome and difficult to reduce owing to much off-balance sheet nonsense and bad procurement practices by the government as often highlighted in the Auditor-General’s report.
A burgeoning debt burden