Government deficit to register RM32bil

The Government comprising the Federal Government, state governments, local authorities and statutory bodies, was estimated to register a deficit of RM32bil (4.5% of GDP) this year.

Expanding social assistance programme

Budget 2009 will expand the social assistance programme by reviewing the eligibility criteria for welfare assistance and enhancing the aid quantum.

PDIM moves towards better risk management

The Perbadanan Insurans Deposit Malaysia (PIDM) is moving towards better risk management when it implemented the Differential Premium System (DPS) in May.

More trains in 3Q next year

ADDITIONAL trains will be in operation for the LRT and KTM Komuter lines by the third quarter of 2009, doubling the current capacity of the rail system in the Klang Valley.

Domestic demand to expand 6.1%

In the face of a more challenging external environment, domestic demand remained the main contributor to the economy and is anticipated to expand 6.1% in 2008.

Global growth to moderate in 2009

Growth in the global economy is expected to continue to moderate in 2009 with growth in the US and the euro-area expected to be constrained by the financial market turbulence and tight credit conditions as well as uncertainties over the full ramifications of the subprime mortgage crisis.

Trade expands in 1H as commodities pick up

MALAYSIA’S total trade expanded by 12.2% during the first six months of this year (Jan-June 2007: 2.2%), in line with increased global demand for commodity products as well as higher import prices.

Global FDI remains steady

Global investment flows have been holding steady despite the uncertain economic climate.

Consumers feel pinch of rising costs

CONSUMERS are feeling the pinch of the recent fuel hike, high electricity tariffs and other inflationary pressures thus resulting in slower consumer spending in the country.

Commuters hope for better public transport

COMMUTERS are keeping their fingers crossed that the public transportation system will finally be improved to mitigate the higher cost of petrol and ease the burden of the rakyat.

Slower global economic growth ahead

Global gross domestic product (GDP) growth this year is expected to register a slower rate of growth at 4.1% compared to 5% in 2007 with rising inflation resulting from food and fuel price hikes eroding growth performance, particularly of developing countries.

More trains in 3Q next year

ADDITIONAL trains will be in operation for the LRT and KTM Komuter lines by the third quarter of 2009, doubling the current capacity of the rail system in the Klang Valley.

Petronas single largest contributor to govt coffers

Non-financial public enterprises (NFPE) continued to contribute a large chunk to the country's economy.

Expanding social assistance programme

Budget 2009 will expand the social assistance programme by reviewing the eligibility criteria for welfare assistance and enhancing the aid quantum.

Promoting renewable energy to cut dependence on fossil fuel

Promotion of renewable energy is one of the strategies to reduce emission levels and dependence on fossil fuels.

Sustaining growth, managing inflationary pressures

The 2009 Budget was formulated amid moderating world growth, high prices of fuel, food, metals and other commodities, geopolitical uncertainties, as well as the fallout from the financial market turmoil in the United States.

Car dealers hope for lower import duties

Klang Valley-based used car dealers are hopeful that the government will consider reducing import duties for foreign cars at the up coming Budget 2009 this week.

Malaysians pin hopes on lower fuel prices

Much to the relief of everyone, the government announced a 6% or 15 sen cut in fuel price for RON97 petrol to RM2.55 a litre as well as 10% or 22 sen cut on RON92 petrol to RM2.40 per litre on Aug 22, to bring forward the ‘floating’ price mechanism.

Govt targets RM35.83b petroleum income tax next year

The government expects to collect RM35.83bil in petroleum income taxes in 2009, a 46.2% increase from RM24.51bil this year due to buoyant prices and higher sales volume, according to the Economic Report 2008/2009.

GDP to grow 5.7% in 2008, 5.4% in 2009

The government has forecast the economy to grow at 5.7% this year and at a slower pace of 5.4% in 2009, according to the Economic Report 2008/2009.

Real people, real pinch

Families from all walks of life are employing various means to cope with rising prices.

Lower GDP growth likely

Firm commodity prices and other factors will cushion the impact of high food and fuel prices

Budget deficit set to widen to 4.8% amid tough times

The deficit for Budget 2009 is expected to widen to 4.8% of the gross domestic product (GDP) due to proactive steps taken by the Government to sustain economic growth and improve the well-being of citizens in light of the elevated fuel and food prices.

Current account surplus still high

Malaysia's balance of payments is expected to strengthen this year, driven by a strong current account surplus and smaller net outflows in the financial account.

Number of new jobs to be lower this year

The number of new jobs is expected to decline this year but this will not affect the unemployment rate, which is projected to remain at 3.2%.

Going domestic to cut cost

With overseas holidays costing more because of fuel surcharges, some holidaymakers have adjusted their holiday plans.

Developing economies caught in a dilemma as crude oil prices stay high

Global economic slowdowns are historically associated with high crude oil prices.

Reassessing policies

With high energy and food prices putting pressure on fiscal management and turmoil in the global financial markets still a major factor, Budget 2009 will focus on enhancing competitiveness, improving the quality of life and building capacity for the future.

Government expenditure to increase by 21% to RM197bil

IN 2008, the Federal Government's total expenditure is expected to increase by 20.5% to RM197bil compared with the 15.5% increase in revenue. Consequently, the overall deficit of the Federal Government is expected to widen to RM34bil or 4.8% of GDP (2007: - RM21bil ; 3.2%).

Bright future ahead

The domestic unit trust industry accounts for more than 70% of the Malaysian investment management industry.

Domestic industries the catalyst

The manufacturing sector is projected to grow by 4.7% in 2008 (2007: 3.1%), driven by higher production in the domestic-oriented industries.

Pemudah to improve public sector work processes, procedures

AN efficient public service is the key factor that attracts private investment and the Government has established a Special Task Force to Facilitate Business (Pemudah) to improve public sector work processes and procedures.

Higher oil production buoys mining and quarrying sector

The mining and quarrying sector grew 1.6% in the first half of 2008, supported by higher crude oil production.

Developers register steady performance

The construction sector remains positive. Value-added in the construction sector improved further by 4.5% attributed to higher civil engineering, special trade works and residential activities.

Banking system remains hale and hearty

The banking system remains resilient and sound, supported by strong capitalisation, higher profitability and improved quality of assets.

Private sector to play key role in agriculture

The agriculture sector is expected to strengthen by 3.6% in 2008, bolstered by oil palm, and other agriculture and livestock sectors. The agriculture sector’s share of the gross domestic product is estimated to remain stable at 7.5% in 2008 (2007:7.6%).

Addressing the multi-faceted challenge of high food prices

The recent rapid rise in international food prices posed serious concerns around the world. According to the Food and Agriculture Organisation (FAO), the food price index climbed 44% in the first half of 2008, relative to the corresponding figure last year.

Confidence in services sector

The growth momentum of the services sector is expected to remain strong in 2008, expanding 7.1% and accounting for 54.3% of the gross domestic product (GDP).

Federal Government to source for borrowings locally

The Federal Government’s borrowings are projected to increase following the higher deficit level for this year.

Total government debt expected to rise by 14%

Total Federal Government debt is expected to increase by as much as 13.7% by year's end. This will bring the total debt to RM303bil, up from RM267bil last year.

Keeping the momentum

The 2009 Budget is aimed at keeping the economic momentum going by implementing programmes to improve the rakyat’s well-being.

Gross value of imports expands 8.3%

The gross value of imports - including cost, insurance and freight - expanded 8.3% in the first six months of this year compared to a year earlier.

Commodities and manufactured goods help boost exports

Malaysia's total exports grew 15.5% in the first six months of this year (Jan-June 2007:1.2%), driven by strong exports of commodities and recovery in the exports of manufactured goods.

Change in eating habits

People are more conscious of where and what to have for meals.

Inflation due to energy and food prices

Inflation rose worldwide this year due to high energy and food prices. From the second half of 2007 to June 2008, crude oil price rose 79% while prices of food commodities (wheat, rice, soybean, corn and crude palm oil/CPO) increased between 30% and 130%.

Tough domestic economic environment

The domestic economic environment is more challenging this year amid slower global growth and rising inflationary pressures.

Housebuyers cry for help

Many people are thinking twice about buying a property as inflation makes itself felt.

Trading in derivatives market is sustained

Trading on the derivatives market was sustained at 3.6 million contracts in the first seven months of this year (Jan-July 2007: 3.7 million contracts), despite the lacklustre performance of the underlying stock market.

Premium income reaches RM15.6bil

Combined premium income of the insurance industry increased 19.5% to RM15.6bil in the first half of 2008 from RM13bil a year earlier.

Islamic banking industry is well-capitalised

The Islamic banking system remained well-capitalised with the risk-weighted capital ratio at 15.1% as at end-June 2008 (end-2007: 15.6%), after taking into account the implementation of the revised capital adequacy framework for Islamic banks in January.

Gross funds up nearly 14% in first six months

Gross funds raised in the capital market increased 13.8% to RM64.8bil for the first six months of 2008 compared with the same period last year.

Small loans to give the poor a headstart

Microfinance programmes in Malaysia are aimed at alleviating poverty through the provision of small loans to poor households for income-generating activities.

Takaful industry experiences strong growth

The takaful industry grew strongly in the first six months with combined takaful contribution income increasing 23.0% to RM1.4bil against the same period last year.

Reports by DALJIT DHESI, ELAINE ANG, RACHAEL KAM, FINTAN NG, YEOW POOI LING, YVONNE TAN, LOONG TSE MIN, SHARIDAN M. ALI, LEONG HUNG YEE, EILEEN HEE, EUGENE MAHALINGAM, SHANNEN WONG, ADIRA SARIF, LEE KIAN SEONG, JANE RITIKOS, NG CHENG YEE, TEH ENG HOCK and LESTER KONG