By BERNAMA
Tengku Zafrul Abdul Aziz
The government’s latest fiscal move early in the year showed its commitment to consolidating the budget deficit and ensuring that budget assumptions remain realistic as external headwinds continue to challenge the economy, said CIMB group chief executive Tengku Zafrul Abdul Aziz.
Commenting on the Budget 2016 recalibration announcement today, Zafrul said the revision of the gross domestic product (GDP) growth forecast to between 4% and 4.5% from the 4% to 5% previously is more realistic.
He also applauded the government for having the strong will to keep its deficit to GDP ratio at 3.1%.
“We expect the medium to longer-term outlook for the economy to remain positive.
“The assurance given by Prime Minister Najib Abdul Razak at the announcement that the economy is not entering a recession and there will be no capital control or ringgit repegging will remove some policy uncertainties and will help us chart our business plans better,” he said in a statement.
Zafrul said while the government will cut further spending to weather the impact of lower oil prices, it is still committed to development spending.
“The additional relief measures for the people, particularly for the low to middle-income group, and the decision to defer only low-impact development projects is an indication of a strong pro-growth policy with the people’s wellbeing not compromised,” he added.
SME Bank group managing director Mohd Radzif Mohd Yunus said the recalibrated Budget 2016 will ensure the country continues to grow and achieve its deficit target.
He said with the proactive, transparent and realistic measures, Malaysia’s economic growth is expected to be sustainable, strong and resilient in facing the global economic challenges.
He said the announcement of the RM6 billion additional financing fund to development financial institutions such as Malaysia Venture Capital Management Bhd to support small and medium enterprises (SMEs) and startup companies is to be welcomed.
“We are prepared to work closely with related agencies in ensuring this effort brings in the desired results,” said Mohd Radzif.
He said SME Bank will continue to focus its efforts on reaching out to the SME community and offer the much-needed financing and capacity building programmes.
Mohd Radzif also said the bank will play its role as an intermediary in providing greater access to financing to ensure the economy continues to record positive growth.
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