According to Malaysian Corporation Rating Bhd (MARC), the government has “grossly underestimated” its opex forecast for the five-year development plan (12MP) tabled by Prime Minister Datuk Seri Ismail Sabri Yaakob in Parliament on September 27.
“Apart from revenue, operating expenses will put constant pressure on the opex,” the rating agency says after taking into account the five-year plan.
The rating agency also criticizes the 12MP indicating that Ismail Sabri fails to recognise the effects of prolonged lockdowns and relief spending when attempting to curb the fallout caused by COVID-19.
After considering factors that were excluded from the official forecast, Opex throughout the period is set to surpass the official estimation of RM264.9 billion in 2025 from RM224.6 billion in 2020. The Prime Minister says the 12MP will cost Rm400 billion.
They also thought the government is implying that by 2025 opex will be returned to the pre-pandemic level which they consider to be too ambitious.
To fulfil the prophecy, it stated that all COVID-19-related social aids must cease after the deadline in 2023, after which the open market will catch up with or exceed official estimates, it said.
“One, unless all Covid-19-related social aids end in 2023, opex will rise much higher than official estimates.
“Two, economic scarring from prolonged lockdowns makes it unlikely that opex average annual growth in the 2020-2025 period (3.36%) will be lower than the pre-pandemic level of 4.96 percent in the 2015-2019 period,” it said.
