malaysia

 
 

Lower price threshold for foreign buyers of properties – boon or bane?

PETALING JAYA: While one of Budget 2020’s allocations for the property sector is aimed at reducing the supply overhang in the country, not all property players think this will solve the problem.

To reduce supply overhang of condominiums and apartments amounting to RM8.3 billion in the second quarter of 2019, the government has announced that it will lower the threshold on high-rise property prices in urban areas for foreign ownership from RM1 million to RM600,000 in 2020.

After tabling the Budget in Parliament, Finance Ministry Lim Guan Eng explained that the move is only applicable to existing unsold units and does not cover new projects that are yet to be launched.

However, National House Buyers Association (HBA) secretary-general Datuk Chang Kim Loong cautioned that existing property owners in the secondary market may capitalise on this situation to increase the selling prices of their properties.

“As a result, property prices could see a sudden shock effect of high increase across the board that will not only result in locals being squeezed out of the housing market but increasing the risk of a property bubble as this sudden rapid rise in property prices caused by lowering the minimum price threshold is definitely not sustainable in the long run.”

Rahim & Co International CEO of real estate agency Siva Shanker believes the Malaysian market is driven by domestic consumption, where property buyers in Malaysia are Malaysians.

“This (lowered threshold for foreign ownership) will open a bigger pool of properties for foreigners to choose from. It will help decrease the overhang, but the overhang problem will largely remain,” he told SunBiz.

PropertyGuru country manager Sheldon Fernandez opined that the move to reduce the foreign ownership threshold is an interim measure to address the ongoing residential overhang in the country.

“However, domestic sentiment must be balanced against the short-term benefit of reducing the oversupply, as external intervention is not an ideal solution,” he said.

SP Setia Bhd president & CEO Datuk Khor Chap Jen said the reduction of the foreign ownership threshold value for unsold stocks of condominiums and apartments located in city areas will help to reduce the overhang for these type of properties as developers can market these range of products to foreign buyers.

“We hope that the state authorities will follow suit on this criteria.”

Mah Sing founder & group managing director Tan Sri Leong Hoy Kum said there has been growing interest in Malaysian properties among foreign buyers, and the reduction in the price threshold will directly benefit the group.

“Lowering the threshold of high-rise property prices in urban areas will have a positive impact as foreign buyers are a blue-ocean pool of potential buyers which can reduce the overhang of properties in this price point.

“It is crucial that respective state governments will respond to this positively and revise their ceiling price accordingly,” he added.


GDP growth projected to pick up to 4.8% next year

Malaysia’s GDP seen growing faster at 4.8% in 2020

> Gross domestic product (GDP) growth is projected to improve marginally to 4.8% in 2020 from 4.7% in 2019.

> Household spending, which accounts for 58% of GDP, will continue to spearhead growth, supported by a stable labour market and benign inflation.

> Domestic demand is expected to expand 4.8% in 2020 against 4% in 2019

> Private consumption is estimated to grow 6.9% in 2020 from 6.8% in 2019, underpinned by sustained economic activities, including major events such as Visit Malaysia 2020, Apec meetings and World Congress on Information Technology 2020.

> Private investment is expected to rise 2.1% in 2020 from 1.5% in 2019, given the resumption of strategic projects and higher exports, particularly electrical and electronics.

> However, public consumption is projected to remain moderate at 2% in 2019 and 1.5% in 2020, in line with the fiscal consolidation path.

Exports to expand 1% in 2020, current account surplus to narrow to RM29b

> In 2020, overall gross exports are expected to expand 1% benefiting from the anticipated improvement in global trade activities and the uptick in the electrical and electronics cycle. This compares with an estimated 0.1% increase in gross exports for 2019.

> Gross imports are projected to turnround 2.7% in 2020 from a 2.5% contraction in 2019, in line with higher imports of intermediate, capital and consumption goods.

> Current account surplus is expected to narrow to RM29 billion or 1.9% of gross national income in 2020 from RM43 billion or 2.9% of GNI in 2019.

> Inflation is projected to expand 2% in 2020, mainly due to the expected introduction of targeted fuel subsidy.

Household debt up slightly to RM1.22 trillion

> Overall household debt increased slighly to RM1.22 trillion, accounting for 82.2% of GDP as at end-June 2019.

> However, the debt level has been moderating since 2015 following macro-prudential measures and financial literacy programmes introduced to rein in household levels.

> Household financial assets remain strong at RM2.63 trillion with the debt servicing capacity of household remained intact, supported by stable income and employment growth.

> The banking system’s loan quality remained sound with stable net impaired loans ratio of 1% as at end-July 2019.

Federal government revenue at RM244.5b for 2020, lower than RM263.3b for 2019

> Federal government revenue is expected to be RM244.5 billion or 15.2% of GDP for 2020.

> Collection of tax revenue higher at RM189.9 billion.

> Non-tax revenue at RM54.6 billion.

> Total expenditure forecast at RM297 billion or 18.4% GDP.

> Higher growth of 13.1% to RM263.3 billion anticipated for 2019 due to one-off Petronas dividend.

Fiscal deficit higher at 3.2% for 2020, to average 2.8% over 3-year period

> The 2020 deficit target of 3.2% of GDP is slightly higher than the 3% originally announced in Budget 2019, but remains on a consolidation path.

> Fiscal deficit is expected to remain at 3.4% of GDP for 2019.

> The Medium-Term Fiscal Framework 2020-2022 has been adopted as a tool for medium-term fiscal planning.

> Total revenue is forecast at RM764.9 billion (15% of GDP).

> Non-petroleum revenue is expected to contribute RM615.7 billion (12.1% of GDP).

> Petroleum-related revenue is projected at RM149.2 billion (2.9% of GDP).

> Total indicative ceiling for expenditure is estimated at RM910.4 billion (17.8% of GDP).

> Operating expenditure allocation RM751.4 billion (14.7% of GDP).

> Development expenditure allocation RM159 billion (3.1% of GDP).

> Fiscal deficit targeted to average 2.8% of GDP over three-year period.

RM297b government expenditure allocated for Budget 2020

> A total of RM297 billion (18.4% of GDP) will be allocated for Budget 2020, of which RM241 billion (14.9% of GDP) will go to operating expenditure and the balance of RM56 billion will go to development expenditure.

> The bulk of the operating expenditure will be channelled to emoluments, followed by supplies and services, debt service charges, retirement charges as well as subsidies and social assistance.

> Development expenditure will be channelled towards promoting economic development, bridging the urban-rural infrastructure gap and enhancing the living standard of people.

> Allocation for 2019 revised upwards to RM316 billion from budget estimates of RM314.63 billion to cater for higher operating expenditure (RM262.3 billion or 17.3% of GDP), while development expenditure constitutes RM53.7 billion or 3.5% of GDP which will be spent on programmes and projects with a high-multiplier impact on the economy.

Federal government debt closes to RM800b or 52.7% of GDP

> As at end-June 2019, federal government debt stood at RM799.1 billion (52.7% of GDP).

> Debt comprises 96.3% of ringgit-denominated securities, and the balance of 3.7% is from offshore borrowings mainly in US dollar and yen.

> Domestic debt stood at RM769.9 billion.

> External debt was at RM931.1 billion (63.1% of GDP). The slight increase was due to a sizeable increase in medium- and long-term offshore borrowing.

> As at end-June 2019, total federal government debt and liabilities exposure was estimated at RM1.17 trillion or 77.1% of GDP, due to an increase in federal government debt and committed guarantees.

> The government is committed to its debt consolidation path with a targeted debt-to-GDP ratio below 50% in the medium term.

Government has extended RM8.9b to 1MDB

> As at end-June 2019, the government has extended an advance of RM8.9 billion to 1Malaysia Development Bhd (1MDB) for debt servicing.

> The government is also in the process of recovering several assets related to 1MDB’s financial trail.

> As at end-June, the government has received about RM920 million, from the recovered assets, which will be utilised to serve 1MDB’s debt obligations.


GDP growth projected to pick up to 4.8% next year

Malaysia’s GDP seen growing faster at 4.8% in 2020

> Gross domestic product (GDP) growth is projected to improve marginally to 4.8% in 2020 from 4.7% in 2019.

> Household spending, which accounts for 58% of GDP, will continue to spearhead growth, supported by a stable labour market and benign inflation.

> Domestic demand is expected to expand 4.8% in 2020 against 4% in 2019

> Private consumption is estimated to grow 6.9% in 2020 from 6.8% in 2019, underpinned by sustained economic activities, including major events such as Visit Malaysia 2020, Apec meetings and World Congress on Information Technology 2020.

> Private investment is expected to rise 2.1% in 2020 from 1.5% in 2019, given the resumption of strategic projects and higher exports, particularly electrical and electronics.

> However, public consumption is projected to remain moderate at 2% in 2019 and 1.5% in 2020, in line with the fiscal consolidation path.

Exports to expand 1% in 2020, current account surplus to narrow to RM29b

> In 2020, overall gross exports are expected to expand 1% benefiting from the anticipated improvement in global trade activities and the uptick in the electrical and electronics cycle. This compares with an estimated 0.1% increase in gross exports for 2019.

> Gross imports are projected to turnround 2.7% in 2020 from a 2.5% contraction in 2019, in line with higher imports of intermediate, capital and consumption goods.

> Current account surplus is expected to narrow to RM29 billion or 1.9% of gross national income in 2020 from RM43 billion or 2.9% of GNI in 2019.

> Inflation is projected to expand 2% in 2020, mainly due to the expected introduction of targeted fuel subsidy.

Household debt up slightly to RM1.22 trillion

> Overall household debt increased slighly to RM1.22 trillion, accounting for 82.2% of GDP as at end-June 2019.

> However, the debt level has been moderating since 2015 following macro-prudential measures and financial literacy programmes introduced to rein in household levels.

> Household financial assets remain strong at RM2.63 trillion with the debt servicing capacity of household remained intact, supported by stable income and employment growth.

> The banking system’s loan quality remained sound with stable net impaired loans ratio of 1% as at end-July 2019.

Federal government revenue at RM244.5b for 2020, lower than RM263.3b for 2019

> Federal government revenue is expected to be RM244.5 billion or 15.2% of GDP for 2020.

> Collection of tax revenue higher at RM189.9 billion.

> Non-tax revenue at RM54.6 billion.

> Total expenditure forecast at RM297 billion or 18.4% GDP.

> Higher growth of 13.1% to RM263.3 billion anticipated for 2019 due to one-off Petronas dividend.

Fiscal deficit higher at 3.2% for 2020, to average 2.8% over 3-year period

> The 2020 deficit target of 3.2% of GDP is slightly higher than the 3% originally announced in Budget 2019, but remains on a consolidation path.

> Fiscal deficit is expected to remain at 3.4% of GDP for 2019.

> The Medium-Term Fiscal Framework 2020-2022 has been adopted as a tool for medium-term fiscal planning.

> Total revenue is forecast at RM764.9 billion (15% of GDP).

> Non-petroleum revenue is expected to contribute RM615.7 billion (12.1% of GDP).

> Petroleum-related revenue is projected at RM149.2 billion (2.9% of GDP).

> Total indicative ceiling for expenditure is estimated at RM910.4 billion (17.8% of GDP).

> Operating expenditure allocation RM751.4 billion (14.7% of GDP).

> Development expenditure allocation RM159 billion (3.1% of GDP).

> Fiscal deficit targeted to average 2.8% of GDP over three-year period.

RM297b government expenditure allocated for Budget 2020

> A total of RM297 billion (18.4% of GDP) will be allocated for Budget 2020, of which RM241 billion (14.9% of GDP) will go to operating expenditure and the balance of RM56 billion will go to development expenditure.

> The bulk of the operating expenditure will be channelled to emoluments, followed by supplies and services, debt service charges, retirement charges as well as subsidies and social assistance.

> Development expenditure will be channelled towards promoting economic development, bridging the urban-rural infrastructure gap and enhancing the living standard of people.

> Allocation for 2019 revised upwards to RM316 billion from budget estimates of RM314.63 billion to cater for higher operating expenditure (RM262.3 billion or 17.3% of GDP), while development expenditure constitutes RM53.7 billion or 3.5% of GDP which will be spent on programmes and projects with a high-multiplier impact on the economy.

Federal government debt closes to RM800b or 52.7% of GDP

> As at end-June 2019, federal government debt stood at RM799.1 billion (52.7% of GDP).

> Debt comprises 96.3% of ringgit-denominated securities, and the balance of 3.7% is from offshore borrowings mainly in US dollar and yen.

> Domestic debt stood at RM769.9 billion.

> External debt was at RM931.1 billion (63.1% of GDP). The slight increase was due to a sizeable increase in medium- and long-term offshore borrowing.

> As at end-June 2019, total federal government debt and liabilities exposure was estimated at RM1.17 trillion or 77.1% of GDP, due to an increase in federal government debt and committed guarantees.

> The government is committed to its debt consolidation path with a targeted debt-to-GDP ratio below 50% in the medium term.

Government has extended RM8.9b to 1MDB

> As at end-June 2019, the government has extended an advance of RM8.9 billion to 1Malaysia Development Bhd (1MDB) for debt servicing.

> The government is also in the process of recovering several assets related to 1MDB’s financial trail.

> As at end-June, the government has received about RM920 million, from the recovered assets, which will be utilised to serve 1MDB’s debt obligations.


GDP growth projected to pick up to 4.8% next year

Malaysia’s GDP seen growing faster at 4.8% in 2020

> Gross domestic product (GDP) growth is projected to improve marginally to 4.8% in 2020 from 4.7% in 2019.

> Household spending, which accounts for 58% of GDP, will continue to spearhead growth, supported by a stable labour market and benign inflation.

> Domestic demand is expected to expand 4.8% in 2020 against 4% in 2019

> Private consumption is estimated to grow 6.9% in 2020 from 6.8% in 2019, underpinned by sustained economic activities, including major events such as Visit Malaysia 2020, Apec meetings and World Congress on Information Technology 2020.

> Private investment is expected to rise 2.1% in 2020 from 1.5% in 2019, given the resumption of strategic projects and higher exports, particularly electrical and electronics.

> However, public consumption is projected to remain moderate at 2% in 2019 and 1.5% in 2020, in line with the fiscal consolidation path.

Exports to expand 1% in 2020, current account surplus to narrow to RM29b

> In 2020, overall gross exports are expected to expand 1% benefiting from the anticipated improvement in global trade activities and the uptick in the electrical and electronics cycle. This compares with an estimated 0.1% increase in gross exports for 2019.

> Gross imports are projected to turnround 2.7% in 2020 from a 2.5% contraction in 2019, in line with higher imports of intermediate, capital and consumption goods.

> Current account surplus is expected to narrow to RM29 billion or 1.9% of gross national income in 2020 from RM43 billion or 2.9% of GNI in 2019.

> Inflation is projected to expand 2% in 2020, mainly due to the expected introduction of targeted fuel subsidy.

Household debt up slightly to RM1.22 trillion

> Overall household debt increased slighly to RM1.22 trillion, accounting for 82.2% of GDP as at end-June 2019.

> However, the debt level has been moderating since 2015 following macro-prudential measures and financial literacy programmes introduced to rein in household levels.

> Household financial assets remain strong at RM2.63 trillion with the debt servicing capacity of household remained intact, supported by stable income and employment growth.

> The banking system’s loan quality remained sound with stable net impaired loans ratio of 1% as at end-July 2019.

Federal government revenue at RM244.5b for 2020, lower than RM263.3b for 2019

> Federal government revenue is expected to be RM244.5 billion or 15.2% of GDP for 2020.

> Collection of tax revenue higher at RM189.9 billion.

> Non-tax revenue at RM54.6 billion.

> Total expenditure forecast at RM297 billion or 18.4% GDP.

> Higher growth of 13.1% to RM263.3 billion anticipated for 2019 due to one-off Petronas dividend.

Fiscal deficit higher at 3.2% for 2020, to average 2.8% over 3-year period

> The 2020 deficit target of 3.2% of GDP is slightly higher than the 3% originally announced in Budget 2019, but remains on a consolidation path.

> Fiscal deficit is expected to remain at 3.4% of GDP for 2019.

> The Medium-Term Fiscal Framework 2020-2022 has been adopted as a tool for medium-term fiscal planning.

> Total revenue is forecast at RM764.9 billion (15% of GDP).

> Non-petroleum revenue is expected to contribute RM615.7 billion (12.1% of GDP).

> Petroleum-related revenue is projected at RM149.2 billion (2.9% of GDP).

> Total indicative ceiling for expenditure is estimated at RM910.4 billion (17.8% of GDP).

> Operating expenditure allocation RM751.4 billion (14.7% of GDP).

> Development expenditure allocation RM159 billion (3.1% of GDP).

> Fiscal deficit targeted to average 2.8% of GDP over three-year period.

RM297b government expenditure allocated for Budget 2020

> A total of RM297 billion (18.4% of GDP) will be allocated for Budget 2020, of which RM241 billion (14.9% of GDP) will go to operating expenditure and the balance of RM56 billion will go to development expenditure.

> The bulk of the operating expenditure will be channelled to emoluments, followed by supplies and services, debt service charges, retirement charges as well as subsidies and social assistance.

> Development expenditure will be channelled towards promoting economic development, bridging the urban-rural infrastructure gap and enhancing the living standard of people.

> Allocation for 2019 revised upwards to RM316 billion from budget estimates of RM314.63 billion to cater for higher operating expenditure (RM262.3 billion or 17.3% of GDP), while development expenditure constitutes RM53.7 billion or 3.5% of GDP which will be spent on programmes and projects with a high-multiplier impact on the economy.

Federal government debt closes to RM800b or 52.7% of GDP

> As at end-June 2019, federal government debt stood at RM799.1 billion (52.7% of GDP).

> Debt comprises 96.3% of ringgit-denominated securities, and the balance of 3.7% is from offshore borrowings mainly in US dollar and yen.

> Domestic debt stood at RM769.9 billion.

> External debt was at RM931.1 billion (63.1% of GDP). The slight increase was due to a sizeable increase in medium- and long-term offshore borrowing.

> As at end-June 2019, total federal government debt and liabilities exposure was estimated at RM1.17 trillion or 77.1% of GDP, due to an increase in federal government debt and committed guarantees.

> The government is committed to its debt consolidation path with a targeted debt-to-GDP ratio below 50% in the medium term.

Government has extended RM8.9b to 1MDB

> As at end-June 2019, the government has extended an advance of RM8.9 billion to 1Malaysia Development Bhd (1MDB) for debt servicing.

> The government is also in the process of recovering several assets related to 1MDB’s financial trail.

> As at end-June, the government has received about RM920 million, from the recovered assets, which will be utilised to serve 1MDB’s debt obligations.


GDP growth projected to pick up to 4.8% next year

Malaysia’s GDP seen growing faster at 4.8% in 2020

> Gross domestic product (GDP) growth is projected to improve marginally to 4.8% in 2020 from 4.7% in 2019.

> Household spending, which accounts for 58% of GDP, will continue to spearhead growth, supported by a stable labour market and benign inflation.

> Domestic demand is expected to expand 4.8% in 2020 against 4% in 2019

> Private consumption is estimated to grow 6.9% in 2020 from 6.8% in 2019, underpinned by sustained economic activities, including major events such as Visit Malaysia 2020, Apec meetings and World Congress on Information Technology 2020.

> Private investment is expected to rise 2.1% in 2020 from 1.5% in 2019, given the resumption of strategic projects and higher exports, particularly electrical and electronics.

> However, public consumption is projected to remain moderate at 2% in 2019 and 1.5% in 2020, in line with the fiscal consolidation path.

Exports to expand 1% in 2020, current account surplus to narrow to RM29b

> In 2020, overall gross exports are expected to expand 1% benefiting from the anticipated improvement in global trade activities and the uptick in the electrical and electronics cycle. This compares with an estimated 0.1% increase in gross exports for 2019.

> Gross imports are projected to turnround 2.7% in 2020 from a 2.5% contraction in 2019, in line with higher imports of intermediate, capital and consumption goods.

> Current account surplus is expected to narrow to RM29 billion or 1.9% of gross national income in 2020 from RM43 billion or 2.9% of GNI in 2019.

> Inflation is projected to expand 2% in 2020, mainly due to the expected introduction of targeted fuel subsidy.

Household debt up slightly to RM1.22 trillion

> Overall household debt increased slighly to RM1.22 trillion, accounting for 82.2% of GDP as at end-June 2019.

> However, the debt level has been moderating since 2015 following macro-prudential measures and financial literacy programmes introduced to rein in household levels.

> Household financial assets remain strong at RM2.63 trillion with the debt servicing capacity of household remained intact, supported by stable income and employment growth.

> The banking system’s loan quality remained sound with stable net impaired loans ratio of 1% as at end-July 2019.

Federal government revenue at RM244.5b for 2020, lower than RM263.3b for 2019

> Federal government revenue is expected to be RM244.5 billion or 15.2% of GDP for 2020.

> Collection of tax revenue higher at RM189.9 billion.

> Non-tax revenue at RM54.6 billion.

> Total expenditure forecast at RM297 billion or 18.4% GDP.

> Higher growth of 13.1% to RM263.3 billion anticipated for 2019 due to one-off Petronas dividend.

Fiscal deficit higher at 3.2% for 2020, to average 2.8% over 3-year period

> The 2020 deficit target of 3.2% of GDP is slightly higher than the 3% originally announced in Budget 2019, but remains on a consolidation path.

> Fiscal deficit is expected to remain at 3.4% of GDP for 2019.

> The Medium-Term Fiscal Framework 2020-2022 has been adopted as a tool for medium-term fiscal planning.

> Total revenue is forecast at RM764.9 billion (15% of GDP).

> Non-petroleum revenue is expected to contribute RM615.7 billion (12.1% of GDP).

> Petroleum-related revenue is projected at RM149.2 billion (2.9% of GDP).

> Total indicative ceiling for expenditure is estimated at RM910.4 billion (17.8% of GDP).

> Operating expenditure allocation RM751.4 billion (14.7% of GDP).

> Development expenditure allocation RM159 billion (3.1% of GDP).

> Fiscal deficit targeted to average 2.8% of GDP over three-year period.

RM297b government expenditure allocated for Budget 2020

> A total of RM297 billion (18.4% of GDP) will be allocated for Budget 2020, of which RM241 billion (14.9% of GDP) will go to operating expenditure and the balance of RM56 billion will go to development expenditure.

> The bulk of the operating expenditure will be channelled to emoluments, followed by supplies and services, debt service charges, retirement charges as well as subsidies and social assistance.

> Development expenditure will be channelled towards promoting economic development, bridging the urban-rural infrastructure gap and enhancing the living standard of people.

> Allocation for 2019 revised upwards to RM316 billion from budget estimates of RM314.63 billion to cater for higher operating expenditure (RM262.3 billion or 17.3% of GDP), while development expenditure constitutes RM53.7 billion or 3.5% of GDP which will be spent on programmes and projects with a high-multiplier impact on the economy.

Federal government debt closes to RM800b or 52.7% of GDP

> As at end-June 2019, federal government debt stood at RM799.1 billion (52.7% of GDP).

> Debt comprises 96.3% of ringgit-denominated securities, and the balance of 3.7% is from offshore borrowings mainly in US dollar and yen.

> Domestic debt stood at RM769.9 billion.

> External debt was at RM931.1 billion (63.1% of GDP). The slight increase was due to a sizeable increase in medium- and long-term offshore borrowing.

> As at end-June 2019, total federal government debt and liabilities exposure was estimated at RM1.17 trillion or 77.1% of GDP, due to an increase in federal government debt and committed guarantees.

> The government is committed to its debt consolidation path with a targeted debt-to-GDP ratio below 50% in the medium term.

Government has extended RM8.9b to 1MDB

> As at end-June 2019, the government has extended an advance of RM8.9 billion to 1Malaysia Development Bhd (1MDB) for debt servicing.

> The government is also in the process of recovering several assets related to 1MDB’s financial trail.

> As at end-June, the government has received about RM920 million, from the recovered assets, which will be utilised to serve 1MDB’s debt obligations.


Supportive of shared prosperity agenda

PETALING JAYA: Budget 2020, which was tabled by Finance Minister Lim Guan Eng last Friday, has been largely seen as one that will help drive Malaysia’s economy towards achieving the goals of shared prosperity set out in the 12th Malaysia Plan.

The theme of this year’s budget was “Driving Growth And Equitable Outcomes Towards Shared Prosperity”, which aims to bring stability to the government’s finances.

Monash University Malaysia vice-president of research & development and Monash Malaysia R&D Sdn Bhd CEO Professor Mahendhiran Nair said he believed the federal government’s budget proposal was the best one put forward, given the volatile global climate.

“I think stabilisers have been put in place, as the government is cautiously optimistic due to the volatile global climate and I think the budget that was presented was the best that they could do given these circumstances,” he told SunBiz.

RHB Bank Bhd’s head of Asean economics research Peck Boon Soon said the proposed incentives would likely help stimulate the economy.

“It is still dependant on how the global economic situation pans out, but if things do not worsen, then it will have a positive impact on private investment,” he told SunBiz.

Meanwhile on the fiscal side, the government projected a deficit of 3.2% of GDP, missing its original 3% target. Expenditure is also expected to increase 6.2% in 2020, while revenue has been budgeted to increase 4.8% to RM244.5 billion.

Another economist told SunBiz that while the budget proposed good measures, it remained to be seen how it would pan out over the long-term.

“It seems like they have given small allocations to cover every segment of the economy, but I am concerned that the budget is still at a deficit, and there were hardly any measures announced that would increase collections,” he said.

Some of the key incentives included raising the minimum wage to RM1,200 per month, RM1 billion worth of investment incentives to attract Fortune 500 companies and global unicorns, automation incentives for SMEs and the [email protected] initiative aimed at creating better employment opportunities for youth and women and reducing over-dependence on low-skilled foreign workers.

Mahendhiran explained the number of incentives targeted towards the middle- and low-income brackets would not only help increase disposable income, but also help to stimulate savings.

“Things like raising the minimum wage, coupled with the other fiscal incentives will allow people to be self-sustaining and scale up and move up the value chain quickly, which is necessary as our economy is changing. It is a natural transition that will have to happen over the next three to five years,” he said.

Peck also echoed the same sentiments, saying he believed that an increase in the minimum wage would likely help improve living standards for people.

Wong & Partners tax practice partners Adeline Wong, Yvonne Beh and Krystal Ng said they welcomed the new incentives to promote high-value added activities in the electrical and electronic (E&E) industry.

“The budget emphasises measures that encourage the growth and development of the digital economy in line with global digitalisation trends. These measures are progressive and demonstrates Malaysia’s commitment towards digital transformation, and are welcomed as they stand to move Malaysia up the global value chain, boost domestic economy and create high quality jobs,” they said in a statement.


Supportive of shared prosperity agenda

PETALING JAYA: Budget 2020, which was tabled by Finance Minister Lim Guan Eng last Friday, has been largely seen as one that will help drive Malaysia’s economy towards achieving the goals of shared prosperity set out in the 12th Malaysia Plan.

The theme of this year’s budget was “Driving Growth And Equitable Outcomes Towards Shared Prosperity”, which aims to bring stability to the government’s finances.

Monash University Malaysia vice-president of research & development and Monash Malaysia R&D Sdn Bhd CEO Professor Mahendhiran Nair said he believed the federal government’s budget proposal was the best one put forward, given the volatile global climate.

“I think stabilisers have been put in place, as the government is cautiously optimistic due to the volatile global climate and I think the budget that was presented was the best that they could do given these circumstances,” he told SunBiz.

RHB Bank Bhd’s head of Asean economics research Peck Boon Soon said the proposed incentives would likely help stimulate the economy.

“It is still dependant on how the global economic situation pans out, but if things do not worsen, then it will have a positive impact on private investment,” he told SunBiz.

Meanwhile on the fiscal side, the government projected a deficit of 3.2% of GDP, missing its original 3% target. Expenditure is also expected to increase 6.2% in 2020, while revenue has been budgeted to increase 4.8% to RM244.5 billion.

Another economist told SunBiz that while the budget proposed good measures, it remained to be seen how it would pan out over the long-term.

“It seems like they have given small allocations to cover every segment of the economy, but I am concerned that the budget is still at a deficit, and there were hardly any measures announced that would increase collections,” he said.

Some of the key incentives included raising the minimum wage to RM1,200 per month, RM1 billion worth of investment incentives to attract Fortune 500 companies and global unicorns, automation incentives for SMEs and the [email protected] initiative aimed at creating better employment opportunities for youth and women and reducing over-dependence on low-skilled foreign workers.

Mahendhiran explained the number of incentives targeted towards the middle- and low-income brackets would not only help increase disposable income, but also help to stimulate savings.

“Things like raising the minimum wage, coupled with the other fiscal incentives will allow people to be self-sustaining and scale up and move up the value chain quickly, which is necessary as our economy is changing. It is a natural transition that will have to happen over the next three to five years,” he said.

Peck also echoed the same sentiments, saying he believed that an increase in the minimum wage would likely help improve living standards for people.

Wong & Partners tax practice partners Adeline Wong, Yvonne Beh and Krystal Ng said they welcomed the new incentives to promote high-value added activities in the electrical and electronic (E&E) industry.

“The budget emphasises measures that encourage the growth and development of the digital economy in line with global digitalisation trends. These measures are progressive and demonstrates Malaysia’s commitment towards digital transformation, and are welcomed as they stand to move Malaysia up the global value chain, boost domestic economy and create high quality jobs,” they said in a statement.


Supportive of shared prosperity agenda

PETALING JAYA: Budget 2020, which was tabled by Finance Minister Lim Guan Eng last Friday, has been largely seen as one that will help drive Malaysia’s economy towards achieving the goals of shared prosperity set out in the 12th Malaysia Plan.

The theme of this year’s budget was “Driving Growth And Equitable Outcomes Towards Shared Prosperity”, which aims to bring stability to the government’s finances.

Monash University Malaysia vice-president of research & development and Monash Malaysia R&D Sdn Bhd CEO Professor Mahendhiran Nair said he believed the federal government’s budget proposal was the best one put forward, given the volatile global climate.

“I think stabilisers have been put in place, as the government is cautiously optimistic due to the volatile global climate and I think the budget that was presented was the best that they could do given these circumstances,” he told SunBiz.

RHB Bank Bhd’s head of Asean economics research Peck Boon Soon said the proposed incentives would likely help stimulate the economy.

“It is still dependant on how the global economic situation pans out, but if things do not worsen, then it will have a positive impact on private investment,” he told SunBiz.

Meanwhile on the fiscal side, the government projected a deficit of 3.2% of GDP, missing its original 3% target. Expenditure is also expected to increase 6.2% in 2020, while revenue has been budgeted to increase 4.8% to RM244.5 billion.

Another economist told SunBiz that while the budget proposed good measures, it remained to be seen how it would pan out over the long-term.

“It seems like they have given small allocations to cover every segment of the economy, but I am concerned that the budget is still at a deficit, and there were hardly any measures announced that would increase collections,” he said.

Some of the key incentives included raising the minimum wage to RM1,200 per month, RM1 billion worth of investment incentives to attract Fortune 500 companies and global unicorns, automation incentives for SMEs and the [email protected] initiative aimed at creating better employment opportunities for youth and women and reducing over-dependence on low-skilled foreign workers.

Mahendhiran explained the number of incentives targeted towards the middle- and low-income brackets would not only help increase disposable income, but also help to stimulate savings.

“Things like raising the minimum wage, coupled with the other fiscal incentives will allow people to be self-sustaining and scale up and move up the value chain quickly, which is necessary as our economy is changing. It is a natural transition that will have to happen over the next three to five years,” he said.

Peck also echoed the same sentiments, saying he believed that an increase in the minimum wage would likely help improve living standards for people.

Wong & Partners tax practice partners Adeline Wong, Yvonne Beh and Krystal Ng said they welcomed the new incentives to promote high-value added activities in the electrical and electronic (E&E) industry.

“The budget emphasises measures that encourage the growth and development of the digital economy in line with global digitalisation trends. These measures are progressive and demonstrates Malaysia’s commitment towards digital transformation, and are welcomed as they stand to move Malaysia up the global value chain, boost domestic economy and create high quality jobs,” they said in a statement.


Supportive of shared prosperity agenda

PETALING JAYA: Budget 2020, which was tabled by Finance Minister Lim Guan Eng last Friday, has been largely seen as one that will help drive Malaysia’s economy towards achieving the goals of shared prosperity set out in the 12th Malaysia Plan.

The theme of this year’s budget was “Driving Growth And Equitable Outcomes Towards Shared Prosperity”, which aims to bring stability to the government’s finances.

Monash University Malaysia vice-president of research & development and Monash Malaysia R&D Sdn Bhd CEO Professor Mahendhiran Nair said he believed the federal government’s budget proposal was the best one put forward, given the volatile global climate.

“I think stabilisers have been put in place, as the government is cautiously optimistic due to the volatile global climate and I think the budget that was presented was the best that they could do given these circumstances,” he told SunBiz.

RHB Bank Bhd’s head of Asean economics research Peck Boon Soon said the proposed incentives would likely help stimulate the economy.

“It is still dependant on how the global economic situation pans out, but if things do not worsen, then it will have a positive impact on private investment,” he told SunBiz.

Meanwhile on the fiscal side, the government projected a deficit of 3.2% of GDP, missing its original 3% target. Expenditure is also expected to increase 6.2% in 2020, while revenue has been budgeted to increase 4.8% to RM244.5 billion.

Another economist told SunBiz that while the budget proposed good measures, it remained to be seen how it would pan out over the long-term.

“It seems like they have given small allocations to cover every segment of the economy, but I am concerned that the budget is still at a deficit, and there were hardly any measures announced that would increase collections,” he said.

Some of the key incentives included raising the minimum wage to RM1,200 per month, RM1 billion worth of investment incentives to attract Fortune 500 companies and global unicorns, automation incentives for SMEs and the [email protected] initiative aimed at creating better employment opportunities for youth and women and reducing over-dependence on low-skilled foreign workers.

Mahendhiran explained the number of incentives targeted towards the middle- and low-income brackets would not only help increase disposable income, but also help to stimulate savings.

“Things like raising the minimum wage, coupled with the other fiscal incentives will allow people to be self-sustaining and scale up and move up the value chain quickly, which is necessary as our economy is changing. It is a natural transition that will have to happen over the next three to five years,” he said.

Peck also echoed the same sentiments, saying he believed that an increase in the minimum wage would likely help improve living standards for people.

Wong & Partners tax practice partners Adeline Wong, Yvonne Beh and Krystal Ng said they welcomed the new incentives to promote high-value added activities in the electrical and electronic (E&E) industry.

“The budget emphasises measures that encourage the growth and development of the digital economy in line with global digitalisation trends. These measures are progressive and demonstrates Malaysia’s commitment towards digital transformation, and are welcomed as they stand to move Malaysia up the global value chain, boost domestic economy and create high quality jobs,” they said in a statement.


Firms urged to fully leverage on exports perks

PETALING JAYA: Malaysian small and medium enterprises (SMEs) and mid-tier companies are urged to fully leverage on the perks announced in Budget 2020.

This can be done through incorporating export plan in their business strategy or enhancing their readily-available export plan for 2020 and beyond, according to Malaysia External Trade Development Corp (Matrade).

Local companies will enjoy more benefits from Matrade’s Market Development Grant (MDG) and export promotion efforts following the increment of the claim ceiling per company for the MDG, from the current RM200,000 to RM300,000.

The ceiling for the participation in international trade fairs will also be revised upwards from RM15,000 to RM25,000.

The government will also allocate RM50 million to encourage SMEs to engage in more export promotion activities.

Matrade CEO Datuk Wan Latiff Wan Musa opined that the move is a strong indication of the government’s aspiration to develop more global champions among Malaysian exporters.

“Matrade is optimistic that the allocation will be a catalyst to facilitate the access of local companies to not only markets such as Asean, China and the US but to emerging markets too, such as Central and South Asia, West Asia, Africa and Latin America. This is indeed a great news for Malaysia’s export community and Matrade will be the engine to mobilise its resources in helping Malaysian companies realise their export sales,” he said.

Moving into 2020, Matrade noted that it will focus on its export promotion activities on emerging high-value sectors such as aerospace, automotive, medical devices, halal, creative content, e-commerce and services, among others.

“It is imperative for us to expand Malaysia’s export capabilities in more areas other than conventional sectors like food & beverages or furniture. Promotion in these sectors will be continued still, but will be centred around more niche areas such as manufacturing services and design engineering. This is in line with our strategy to diversify Malaysia’s top exported products too,” he added.