Mission: To Balance the Budget

Summary


IN the second part of this article, we went through two key issues when

discussing the Malaysian economy: export performance and the ringgit peg.

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Extract


Mission: To Balance the Budget

Another closely related topic that often takes centrestage among foreign

investors is the budget deficit.

The reason is obvious: Malaysia's budget deficit is among the largest in

Southeast Asia in terms of its ratio to the Gross Domestic Product (GDP).

The negative budget gap, which started in 1998, occurs as a result of an

expansion of government spending (pump-priming) coupled with a reduction

in revenue following the recession experience...

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