This article first appeared in The Edge Financial Daily, on June 10, 2016.

KUALA LUMPUR: A day after the World Bank slashed this year’s global growth forecast to 2.4% from the 2.9% it projected in January on stubbornly low commodity prices and faltering demand in advanced economies, Putrajaya said Malaysia will still achieve its targeted 4% to 4.5% growth in 2016, as it remains committed to continuing its fiscal consolidation efforts.

In a statement yesterday, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the government will continue to optimise its expenditure and rearrange its development projects according to their importance.

“The International Monetary Fund has projected that the world economy will grow slower at a rate of 3.2% from 3.4%, and this is going to impact the domestic economy. Nevertheless, the government is committed to continue its steps in fiscal consolidation, and [the] government fiscal deficit is expected to decrease to 3.1% of gross domestic product in 2016,” he said.

Ahmad Husni also outlined measures by which ministries and agencies are required to spend more prudently, specifically in the recruitment of civil servants — with no new unit or institution to be established — and the reprioritising of programmes and projects. He also stressed that the appointment of a third-party consultant is prohibited, except for highly technological projects which require specialised knowledge.

Official visits and the number of officials allowed to go overseas will also be limited. Further, the use of government premises for events will be prioritised, while administration costs like printing and supply will be trimmed.

Meanwhile, he assured that the government will continue to execute high-impact development projects such as the mass rapid transit, light rail transit and Pan Borneo Highway, which have the potential to bring multiplier effects to the economy. “The government will closely monitor domestic economic development and execute initiatives that boost the export sector, tourism, and increase investment and private consumption,” he said.

These initiatives, he added, include the reduction in non-tariff barriers among Asean countries; aggressively increasing access to markets like India, the Middle East and Eastern Europe; and the broadening of market opportunities in the halal industry, Islamic finance, healthcare services, tourism and agricultural products.

The government will also prepare a blueprint for the development of the digital economy that comprises guidelines and regulations for entrepreneurs and investors, he also said.

Further, Malaysia will extend the e-visa facility to other countries like Russia and India, while promoting ecotourism, health tourism and heritage sites. At the same time, it will continue to encourage foreign investments, while boosting private consumption by increasing disposable income.

With these steps, Ahmad Husni said the government is confident of achieving its projected domestic economy growth of between 4% and 4.5% this year.