Malaysia cuts spending, touts ‘careful and flexible’ stance amid global turmoil

Nation’s budget for 2023 is smaller than this year’s, amid expectations revenue will decline and world’s projected slowdown

‘Turmoil in world geopolitics, fall in global economic growth surely demands all nations be careful and flexible to face any eventualities’

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Tengku Zafrul Aziz, Malaysia’s finance minister, who will cut spending next year. Photo: Bloomberg

Published: 6:35pm, 7 Oct 2022Updated: 7:26pm, 7 Oct 2022

Malaysia on Friday presented a smaller budget for 2023 compared to this year, on expectations of a decline in revenue and efforts to restructure public spending ahead of a projected global slowdown, amid talk of parliament being dissolved soon to pave the way for an early general election.

Prime Minister Ismail Sabri Yaakob has come under pressure from his United Malays National Organisation (Umno) party to dissolve parliament after its leaders pushed him to meet the king, Sultan Abdullah Sultan Ahmad Shah, to seek royal assent for a dissolution as soon as possible.

Finance Minister Tengku Zafrul Abdul Aziz tabled a 372.3 billion ringgit (US$80 billion) budget for 2023, lower than the 385.3 billion ringgit the government expects to spend this year. The 2022 budget was revised upwards from the initial figure of 332.1 billion ringgit as surging global crude oil prices caused a sharp increase in the fuel subsidy bill.

Revenue is expected to fall by 4.4 per cent to 272.57 billion in 2023 from the 285.22 billion ringgit estimated for this year.

The Prime Minister of Malaysia, Ismail Sabri Yaakob, waves during National Day celebrations in Kuala Lumpur in August. He is under pressure from his party to dissolve parliament. Photo: dpa

“The global economic situation requires us to continue to be cautious. Turmoil in world geopolitics and the fall in global economic growth surely demands that all nations – not just Malaysia – be careful and flexible to face any eventualities,” Zafrul told parliament when tabling the budget.

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