Prime Minister Datuk Seri Anwar Ibrahim, flanked by his deputies, greeting the crowd as he arrives for the Budget 2024 Consultation programme in Putrajaya
PETALING JAYA: Budget 2024 is likely to feature a delicate balancing act by the government between continued economic support while ensuring debt sustainability, says RHB Research.
In a research note yesterday, it said the budget is likely to remain mildly expansionary in nature, with substantial support towards selected priority sectors and continued assistance to ease the financial burdens of the targeted groups.
“We expect some form of fiscal consolidation measures to be announced, which include the enhancement of revenue, as well as the rationalisation of expenditure allocation.
“The fiscal resources would be channelled in a more targeted approach and allocated in priority areas,” it said.
Hence, RHB Research said it has revised its 2024 fiscal deficit projection to 4.5% of gross domestic product (GDP) for 2024 versus its previous estimate of 4.8% of GDP.
On revenue enhancement, it said no major changes in consumer tax is to be expected.
“The goods and services tax is unlikely to be reintroduced in Budget 2024, as containing the issue of the rising cost of living remains one of the priorities of the current administration.
“Among the new types of taxes that are scheduled to be implemented by 2024 is the capital gains tax,” it said.
RHB Research said that on the expenditure side, it expects the development expenditure allocation to trend around RM95bil to RM100bil, in line with the revised spending ceiling for the 12th Malaysia Plan (12MP) projects.
It said the targeted subsidy programme might be implemented by the beginning of next year.
RHB Research said a marginal increment for federal civil servants might be tabled in the upcoming budget announcement, where a more comprehensive review of the civil servants’ salary scheme is expected to be completed in the next six months.
Meanwhile, RHB Research expects continued support for small and medium enterprises as well as priority sectors such as renewable energy, technology and digital, electrical and electronics, agriculture and rare earth industries.
“There might be a continuation of the preferential tax rate for micro, small and medium enterprises, micro-loan facilities and more support for startups and young entrepreneurs,” it said.
It added that the budget might include some short-term initiatives and plans in line with the targets and goals set under the 12MP Mid-Term Review. — Bernama
