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

Russia attacked Ukraine's energy system and some cities with cruise and ballistic missiles plus drones on Wednesday in an "inhuman" Christmas Day assault, Ukraine's President Volodymyr Zelenskiy said.

Russia launches 'inhuman' Christmas Day attacks, Ukraine says

Talks between China and Japan's foreign ministers in Beijing have paved way for Japan to host China's foreign affairs chief next year, and mutual agreement to hold a security dialogue as soon as possible, Japan said on Wednesday.

China, Japan foreign ministers agree visit, security dialogue

Japan's Nippon Steel is seeing support for its proposal to acquire US Steel in the regions of the US where steel mills are located, Nippon Steel's President Tadashi Imai told reporters on Wednesday.

Nippon Steel's US Steel takeover plan has support in steelmaking areas, executive says

China refrained from cutting the interest rate and drained the most cash since 2014 with a one-year policy tool, keeping its powder dry ahead of possible escalation in trade tensions with the US next year.

China avoids rate cut to keep ammunition for future pressure

South Korea's suspended President Yoon Suk Yeol did not respond on Wednesday to a second summons by anti-corruption authorities who, along with prosecutors, are investigating his short-lived martial law decree issued early this month.

South Korea's Yoon defies second agency summons over martial law

An Embraer passenger plane flying from Azerbaijan to Russia crashed near the city of Aktau in Kazakhstan on Wednesday with 62 passengers and five crew on board, Kazakh authorities announced, saying that 32 people had survived.

Azerbaijan Airlines plane crashes in Kazakhstan, many feared dead

The price of a litre of RON95 petrol will remain unchanged at RM2.05, while the retail price of RON97 will increase by three sen from RM3.22 per litre to RM3.25 per litre from Thursday to Jan 1, 2025.

RON95, diesel prices unchanged, RON97 up three sen

China stocks closed roughly flat on Wednesday, as gains in energy shares offset losses in small-cap shares, while the Hong Kong market was closed for a public holiday.

China stocks close flat, energy gains offset small-cap losses

Japan's Nikkei share average reversed early losses to end higher on Wednesday, driven by gains in the auto sector although trade was dominated by retail investors, who bought back cheap stocks in muted trade with many global markets closed for the holidays.

Japan's Nikkei reverses course, ends higher as autos rise

Prime Minister Datuk Seri Anwar Ibrahim has assured that the Madani government will provide full cooperation if efforts to locate Malaysia Airlines flight MH370 yield results.

Anwar: Govt will fully cooperate if MH370 search yields results

Private equity firms KKR and Bain Capital each offered more than US$5 billion (RM22.44 billion) in first-round bids for the non-core assets of Japan's Seven &amp; i Holdings, according to people familiar with the matter.

KKR and Bain each bid more than US$5b for Seven & i assets — Reuters

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