Finance Minister Lim Guan Eng told investors to expect 'pain and sacrifice' in the 2019 budget but a lack of actual belt-tightening will put pressure on the ringgit
Saddled with debt and liabilities exceeding 1 trillion ringgit (US$240.3 billion) and the risk of a credit rating downgrade, Malaysian Finance Minister Lim Guan Eng had forewarned investors to expect “pain and sacrifice” upon the release of the new Pakatan Harapan government’s inaugural budget.
Amid expectations of new taxes and austerity spending cuts, Lim quipped that he could end up as the most unpopular finance minister in the nation’s history. But when Malaysia’s six-month-old government announced its 2019 budget on November 2, there were no substantial spending cuts to be found.
Observers of Southeast Asia’s third-largest economy, who for months have waited for signs of fiscal clarity from Prime Minister Mahathir Mohamad’s freshly installed government, now have a clearer picture after the unveiling of an expansionary budget that prioritizes institutional reform and will raise the national deficit to its highest level in five years.
All eyes were on Lim, a trained accountant and former chief minister of the state of Penang, as he stood to table the high-stakes budget in a closely-watched parliamentary address, a make or break opportunity for the newly minted finance minister to prove his mettle as detractors and naysayers have already started to question his management.
Nile Bowie is a writer and journalist with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.
Saddled with debt and liabilities exceeding 1 trillion ringgit (US$240.3 billion) and the risk of a credit rating downgrade, Malaysian Finance Minister Lim Guan Eng had forewarned investors to expect “pain and sacrifice” upon the release of the new Pakatan Harapan government’s inaugural budget.
Amid expectations of new taxes and austerity spending cuts, Lim quipped that he could end up as the most unpopular finance minister in the nation’s history. But when Malaysia’s six-month-old government announced its 2019 budget on November 2, there were no substantial spending cuts to be found.
Observers of Southeast Asia’s third-largest economy, who for months have waited for signs of fiscal clarity from Prime Minister Mahathir Mohamad’s freshly installed government, now have a clearer picture after the unveiling of an expansionary budget that prioritizes institutional reform and will raise the national deficit to its highest level in five years.
All eyes were on Lim, a trained accountant and former chief minister of the state of Penang, as he stood to table the high-stakes budget in a closely-watched parliamentary address, a make or break opportunity for the newly minted finance minister to prove his mettle as detractors and naysayers have already started to question his management.
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