budget deficit


China boosts holdings of US Treasuries by most in six months

BEIJING, April 17 — China’s holdings of Treasuries rose by the most in six months, underscoring the attractiveness of US assets even amid trade tensions between the world’s two largest economies. China’s ownership of US bonds, bills and…

US Fed: Prospect of trade war poses ‘downside risks’ to economy

WASHINGTON, UNITED STATES: The prospect of a trade war poses ‘downside risks’ to the US economy, which otherwise is poised to grow at a solid pace, the Federal Reserve said. While the Fed said the steep tariffs on steel and aluminium imports that President Donald Trump imposed last month would not on their own have […]

US deficit to balloon beyond US$1t by 2020, CBO says

WASHINGTON, April 10 — The US budget deficit will surpass US$1 trillion (RM3.86 trillion) by 2020, two years sooner than previously estimated, as tax cuts and spending increases signed by President Donald Trump do little to boost long-term…

US trade deficit rises to near 9-1/2-year high; jobs market tightens

WASHINGTON, April 5 — The US trade deficit increased to a near 9-1/2-year high in February, with both exports and imports rising to record highs, but the shortfall with China narrowed sharply. News of the worsening trade deficit comes as the…

Euro falls as concerns about low inflation resurface

LONDON, March 27 — The euro fell back from a five-week high today, as concerns about weak inflation and a slowdown in company borrowing raised questions about the momentum of the euro zone’s economic expansion. After a big gain yesterday,…

Biggest currency whales make their move amid trade war tensions

NEW YORK, March 27 — For the first time in a decade, the world’s central banks are looking beyond the US dollar to build their currency reserves. With US protectionism on the rise, a number of Wall Street strategists say the case for the…

PBOC’s Yi pledges more open financial sector and reduced risk

BEIJING, March 25 — People’s Bank of China Governor Yi Gang said the nation will further ease access to its financial sector and coordinate the opening with currency reforms. China will open the capital account in an “orderly” way and…

Supplementary budget won’t derail efforts to cut fiscal deficit: Economists

PETALING JAYA: The tabling of a supplementary budget bill is unlikely to hinder the government from achieving its fiscal deficit target of 2.8% of the gross domestic product (GDP) in 2018 given better revenue collection, say economists.

In a supplementary budget bill tabled in Parliament on Monday, Putrajaya sought approval for an additional RM7.12 billion under Budget 2017 for the purpose of covering “additional expenditure on services and expenses”.

In October 2016, Prime Minister Datuk Seri Najib Abdul Razak tabled a RM260.8 billion Budget 2017.

Economists are of the view that the supplementary budget will not affect the government’s target of reducing fiscal deficit to 2.8% this year.

Sunway University Business School Professor of Economics Dr Yeah Kim Leng and RHB Research Institute economist Vincent Loo Yeong Hong noted that higher revenue from crude oil due to recovery of crude oil prices and higher tax collection will ensure that the target is within reach.

“Given that the supplementary budget will be partly offset by higher revenue collection due to a more buoyant economy, the fiscal deficit target of 2.8% of GDP is likely to be met. Another key factor helping the government to achieve the deficit target is that the GDP denominator expanded strongly at 9.9% last year, thereby shrinking the debt-to-GDP ratio,” Yeah told SunBiz.

Adding that the budget deficit was at RM39.9 billion or 3% of the GDP in 2017, Loo said higher expenditure is covered from the higher-than-expected revenue from other sources.

He said the government, which has been tabling a supplementary budget since 2009, has a track record of staying within its deficit numbers since 2011.

Nonetheless, Yeah believes the need for a supplementary budget will be reduced this year on the back of the achievable total revenue target of RM240 billion with no spending surprises.

Institute of Democracy and Economic Affairs acting CEO Ali Salman pointed out that the supplementary budget has seen a downward trend.

“The supplementary budget this year is higher than last year’s, but the federal government has substantially reduced the supplementary budget from the range of RM16 billion to RM7.1 billion over last five years. This should be seen as a positive development in the backdrop of reducing fiscal deficit, which will help the government achieve its macroeconomic targets,” he said.

Last year, the government sought an extra RM3.1 billion under Budget 2016.

Philippines, Indonesia fall sharply ahead of Fed meet


BENGALURU (March 20): Philippine and Indonesian shares fell sharply on Tuesday, leading the losses across Southeast Asia, as overnight declines on Wall Street hurt risk appetite, in the run up to U.S. Federal Reserve Chairman Jerome Powell’s first policy meeting. Asian equities outside Japan edged lower after the three major U.S. indexes retreated on concerns over increased regulation for large tech companies, with Facebook Inc shares plunging 6.8%. Philippine shares dropped as much as 2.2%, led by losses in financials and industrials. The Philippines, where inflation quickened in February, hasRead More

Philippine, Indonesian stocks lead South-east Asia losses ahead of Fed meet

SINGAPORE, March 20 — Philippine and Indonesian shares fell sharply today, leading the losses across South-east Asia, as overnight declines on Wall Street hurt risk appetite, in the run up to US Federal Reserve Chairman Jerome Powell’s first…