Malaysian Prime Minister Najib Razak, who is also the Finance Minister, will table the 2017 Budget in Parliament today. The challenging global economic environment, which has seen slumps in oil prices since 2014, will make fiscal prudence a priority in the upcoming Budget allocations by the Najib government.

Public debt as a percentage of gross domestic product is almost hitting Malaysia’s 55 per cent ceiling, while the Budget deficit was 5.6 per cent of GDP from January to June, well above the year’s 3.1 per cent target.

The government will have to balance social and economic stability imperatives. This means concurrently addressing the pressing needs of the people by spending on welfare programmes and health and education, while ensuring a lower fiscal deficit target, which is necessary to maintain Malaysia’s credit ratings and foreign investor confidence.

… Saleena Saleem and Mohamed Nawab Osman are both with the Malaysia Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University. Ms Saleem is an Associate Research Fellow while Dr Nawab is the programme coordinator.