Malaysia to delay large public projects
Malaysia will most likely have to delay its announced large publicly-funded investment projects because the main source of the funds, the new goods and service tax, will take 14 months to implement if announced in the budget in October 2013.
The tax is meant to broaden Malaysia’s tax base and tackle a fiscal deficit that has widened to $4.5 billion, as well as a shrinking current account surplus which fell sharply to $780 million in the second quarter. There will also be an announcement on subsidy rationalisation soon, the government said.
Some large public sector projects might either be reviewed or scrapped space. No projects were identified yet, but the $15 billion Mass Rapid Transit (MRT) rail system project will reportedly not be affected. The possible rescheduling refers to projects with heavy public sector involvement, not private sector projects.
Malaysia’s annual growth rate picked up slightly to 4.3 per cent in the second quarter. It was bolstered by strong government spending before national elections in May and resilient domestic demand helped by large infrastructure projects.
The Malaysian ringgit has lost more than 7 per cent so far in 2013 against the dollar and stocks have slid nearly 7 from their peaks in mid May amid a global emerging market sell-off.
Malaysia will most likely have to delay its announced large publicly-funded investment projects because the main source of the funds, the new goods and service tax, will take 14 months to implement if announced in the budget in October 2013. The tax is meant to broaden Malaysia's tax base and tackle a fiscal deficit that has widened to $4.5 billion, as well as a shrinking current account surplus which fell sharply to $780 million in the second quarter. There will also be an announcement on subsidy rationalisation soon, the government said. Some large public sector projects might either be reviewed...
Malaysia will most likely have to delay its announced large publicly-funded investment projects because the main source of the funds, the new goods and service tax, will take 14 months to implement if announced in the budget in October 2013.
The tax is meant to broaden Malaysia’s tax base and tackle a fiscal deficit that has widened to $4.5 billion, as well as a shrinking current account surplus which fell sharply to $780 million in the second quarter. There will also be an announcement on subsidy rationalisation soon, the government said.
Some large public sector projects might either be reviewed or scrapped space. No projects were identified yet, but the $15 billion Mass Rapid Transit (MRT) rail system project will reportedly not be affected. The possible rescheduling refers to projects with heavy public sector involvement, not private sector projects.
Malaysia’s annual growth rate picked up slightly to 4.3 per cent in the second quarter. It was bolstered by strong government spending before national elections in May and resilient domestic demand helped by large infrastructure projects.
The Malaysian ringgit has lost more than 7 per cent so far in 2013 against the dollar and stocks have slid nearly 7 from their peaks in mid May amid a global emerging market sell-off.
