Budget 2021: Government aims to reduce country’s fiscal deficit to under 4% of GDP

Putrajaya is looking to reduce the country’s fiscal deficit to under 4 percent of GDP in the next three to four years under its new reform agenda.

Due to higher federal government fiscal deficit to finance stimulus measures, public sector debt registered an increase to RM1.2 trillion. This amounts to 85.5 percent of GDP in 2020 from RM1.136 trillion.

Putrajaya announced RM 10 billion to fund the Kita Prihatin package as part of their efforts to boost economy recovery.

Finance minister, Tengku Zafrul Tengku Abdul Aziz highlighted that the federal government’s total gross borrowings are expected to increase by 31.5 percent from the original estimate to record RM181.5 billio, amounting 12.6 percent of 2020’s GDP.

Current account balance is expected to register a lower surplus next year at RM20.3 billion, 1.3 percent to the gross national income.

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