Finance Minister Datuk Seri Tengku Zafrul has declared that Budget 2021 will be an expansionary budget.  

What would an expansionary budget in the midst of a pandemic entail?  

Here are the insights from bankers from different segments of the banking business on this.

What could an expansionary budget entail?  

Budget 2020, which was announced last Friday (Oct 11) by Finance Minister Lim Guan Eng, has spurred various reactions from brokers.

"Unlike its austerity sounding predecessor, Budget 2020 certainly heard a change of tone," Hong Leong Investment Bank Research analysts said.

What equity strategists think about Budget 2020

The Government's economic growth projection of 4.8% in 2020 — slightly more than the estimated 4.7% in 2019 — may be a bit too ambitious, compared with the market consensus of 4.3% in 2020.

For OCBC Bank chief economist Selena Ling, even with the Government's overt efforts in Budget 2020 to prop up private consumption — which is an important part of the economy at close to 60% of the total Gross Domestic Product (GDP) by expenditure — she still thinks the overall growth target might be hard to reach.

Govt's GDP growth projection of 4.8% in 2020 may be too ambitious, say economists

Malaysia's Budget 2020 represents a prudent balance between the competing needs for Malaysia to preserve fiscal sustainability, while also responding to the realities of a slowing economic environment, said the World Bank's lead economist for Malaysia, Richard Record.

"We welcome the emphasis on measures to boost jobs and private investment, particularly by SMEs through increased digital adoption. Proposals to reform Malaysia’s investment incentives framework, focusing particularly on job creation and SME linkages as well as enhanced monitoring and evaluation, are an important step in the right direction," Record said in a statement

Malaysia's Budget 2020 strikes a prudent balance — World Bank

Budget 2020 is a testament to the fact that the Federal Government is committed to narrowing development between the peninsula and East Malaysia, said Works Minister Baru Bian.

“This is an improvement from the 2019 allocation Budget, I believe it has to be done in the capacity of the government of the day, you have to be reasonable, and at the same time we have to be responsible,” he told reporters after the tabling of Budget 2020 today

Budget 2020 shows Putrajaya pays attention to Sabah and Sarawak, Baru Bian says

KUALA LUMPUR (Oct 11): The expanded Budget 2020 may put the government’s original 3% deficit target for next year further out of reach, against a projected decline in revenues, said Moody’s Investors Service.

“Fiscal strength will continue to constrain Malaysia’s credit profile, although the focus on some inclusive growth measures will be credit positive for the country if sustained over time,” said its vice-president — senior analyst, sovereign risk group, Anushka Shah.

Expanded budget pushes govt’s 3% deficit goal further out of reach — Moody’s

KUALA LUMPUR (Oct 11): Audit firms lauded the measures announced in Budget 2020 as the budget is seen to be focused on driving growth for the long term, amid the current uncertain global environment.

Pricewaterhouse Coopers Malaysia tax leader Jagdev Singh pointed out that this is the first budget that provides some clarity on the nation’s approach in navigating the digital and high-technology economy.

Budget 2020: A growth-driven, long-term budget, say audit firms

The Malaysian Employers Federation (MEF) has raised concerns over the Government’s proposal to increase minimum wage in cities and major towns to RM1,200 a month from RM1,100 at present.

MEF also said that the proposals to increase maternity leave and extend eligibility of overtime to a bigger employee group would “further add to the cost of doing business”.

MEF raises concerns on minimum wage hike, Employees Act review

Further details about the Johor Bahru-Singapore Rapid transit System project will be revealed "within the next few weeks", said Transport Minister Anthony Loke.

“The Finance Minister has indicated that the Government is supportive of the project. We are now in the midst of discussions. I will make an announcement on the RTS very soon, within the next few weeks, because the extension of the suspension of the agreement is until Oct 31 this year,” he told reporters at Parliament lobby today, following the tabling of Budget 2020.

More details on Johor-Singapore RTS to be revealed in weeks — Loke

The proposal by the Government to merge Malaysia's development financial institutions (DFI) will lead to greater synergies, as well as fulfilling the needs of the new economy, according to Bank Pembangunan Malaysia Bhd (BPMB).

In a statement following the Budget 2020 announcement today, BPMB said the proposal is a "positive development" in the Government's efforts to strengthen the DFI eco-system

DFI merger will lead to greater synergies, says Bank Pembangunan

Several property-related measures were announced during the tabling of Budget 2020 by Finance Minister Lim Guan Eng, including adjustments to the real property gains tax (RPGT) and the lowering of the threshold for foreign buyers of high rise properties, as well as the introduction of a Rent-to-Own (RTO) scheme for first-time buyers.

Here’s what property developers think of the Budget measures

What property players are saying about the Budget

KUALA LUMPUR (Oct 11): The Armed Forces Fund Board (LTAT) has welcomed the 12% increment in the allocation for the Ministry of Defence to RM15.6 billion in Budget 2020, from RM13.9 billion in Budget 2019.

“This increment bodes well for us, given that it provides opportunities to companies under the current LTAT stable that are key participants in the maritime sector, with current projects with the Ministry,” the board’s chief executive Nik Amlizan Mohamed said in a statement.

LTAT pleased with increased budget allocation to Mindef

KUALA LUMPUR (Oct 11): The government’s Budget 2020 continues to allocate the largest amount to the Ministry of Education — increasing its allocation by 6.5% to RM64.1 billlion from RM60.2 billion this year.

Of this, the portion for school maintenance and upgrading works is also higher at RM735 million, from RM652 million last year.

Education ministry gets biggest chunk at RM64.1b

The Government is proposing to give wage and hiring incentives to employees and employers in a bid to address the high youth unemployment rate in the country, and to reduce the country’s over-dependence on low-skilled foreign workers.

Putrajaya proposes to spend RM6.5 billion across five years in an initiative called “Malaysian@Work”, Minister of Finance Lim Guan Eng announced in Budget 2020 today.

Incentives for employers, workers in bid to address employment woes

The global economy is showing remarkable resilience but there is no room for complacency, the head of the International Monetary Fund's steering committee said on Saturday, while divisions over Russia's war against Ukraine sparked a walkout of delegates.

IMF committee chair says global economy resilient; delegates walk out on Russian official

US President Donald Trump waived massive tariffs linked to Russian energy exports mandated in a law that he signed last month, as the measures complicated his push to lower diesel prices ahead of the US midterm elections.

Trump halts new Russia energy sanctions to ease diesel costs

Former natural resources and environmental sustainability minister Nik Nazmi Nik Ahmad will be barred from all official activities of Parti Bersama Malaysia (Bersama) for three months from Oct 20 to Jan 19, 2027.

Bersama bars Nik Nazmi from official activities for three months — president

Parti Keadilan Rakyat (PKR) will field a mix of seasoned and experienced candidates, young people and women from various ethnic groups in the 16th Melaka state election on Nov 14.

Melaka polls: PKR to field experienced, young and women candidates, says Amirudin

Singapore has identified seven companies it says were involved in wildfires in Indonesia that have blanketed the city-state in haze, stepping up scrutiny of firms linked to the blazes.

Singapore names seven companies over Indonesia haze fires

Electricity supply to all areas affected by a fire at the Kangkar Tebrau Main Intake Substation in Johor on Friday was fully restored within 77 minutes, Tenaga Nasional Bhd (TNB) (KL:TENAGA) said.

TNB restores power within 77 minutes after Kangkar Tebrau substation fire

The National Physical Planning Council (MPFN) has given in-principle approval to the proposed development of the National Maritime Port City and Carey Island Port Special Economic Zone.

National Physical Planning Council okays Carey Island development, project to contribute RM4.7b to GDP, says Nga

Every year, sea turtles return to the beaches of northern KwaZulu-Natal, in South Africa, where they began life. Once they leave the shore, some travel north through the Mozambique Channel, using waters and coastal habitats off Mozambique and Madagascar, while others journey into the wider Indian...

Sustainable Development Now: Conserving a Connected Ocean

Wall Street has spent the year betting on staggering artificial intelligence (AI) growth while worrying about stubborn inflation. This week, investors got a fresh taste of both risks: a deepening rout in the AI complex that reached into its debt financing, and oil at US$110 a barrel threatening to make inflation harder to contain.

Wall Street anxiety spreads as AI rout meets US$110 oil shock

Anthropic PBC has presented its own draft bill to US lawmakers with a plan for regulating artificial intelligence (AI) safety and security, in a moment of heightened concern about the potential risks of the rapidly advancing technology.

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