Categories: Finance

Budget 2023: Malaysia’s Ministry of Finance Sets New Goals

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Malaysia has set three primary aims for its Budget 2023 plans, with the shadow of the COVID-19 recovery still looming over the country along with the war in Ukraine, or more accurately, the European and American responses to Russia’s invasion of Ukraine.

Malaysia is also attempting to capitalise on global growth (SIC) and possibilities, according to the Ministry of Finance.

While global growth is in tatters and will continue to be so for the next few months, Malaysia will handle downside threats.

Malaysia confronts a number of potential negative consequences as a result of geopolitical tensions, including Ukraine, the South China Sea, and Taiwan, among others.

Because the global supply chain is severely disrupted, and Malaysia is a member of that system, it is destined to experience even greater difficulties in the near future.

Commodity and food prices are being impacted locally and globally as a result of the disruptions. To keep inflation under control and avoid a public backlash, smarter policies will be required.

But, in addition to these well-known global difficulties, new challenges are emerging, all of which will have an influence on Malaysia in the long run.

New long-term challenges

There are topics like diversity and the green economy to consider.

What will Budget 2023 have on these issues, and how will the country defend itself against the European and American lobby, as well as prospective economic blockades against countries who do not adhere to greater diversity and gender equality?

Commodity and food prices are being impacted locally and globally as a result of the disruptions. To keep inflation under control and avoid a public backlash, smarter policies will be required.

As the Ministry of Finance states, the country would need longer-term reforms (what are the targets for reform?).

Budget: The Three Targets

The Ministry’s Pre-Budget Statement highlights three specific areas that will be the focus in Budget 2023:

a. Formulating people-centric initiatives, particularly those that generate job opportunities, raise incomes, strengthen social protection and enhance the rakyat’s socio-economic wellbeing.

b. Creating a conducive business environment, especially on enhancing the competitiveness and productivity of small and medium enterprises (SMEs), boosting the recovery of tourism and other pandemic-impacted sectors, leveraging on Malaysia’s leadership in Islamic finance, as well as catalysing new growth areas including moving industries up the value chain.

c. Driving a more inclusive and sustainable development model to support economic growth, particularly on narrowing the disparities between regions and communities, as well as promoting sustainable development and strengthening food security.

“As an important enabler in driving the nation’s development, Budget 2023 will also focus on improving the effectiveness of public service delivery and enhancing the ease of doing business,” says the MOF.

And then there is the eternal partnership between the government and the private sector, which is not new.

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