Govt plugs the hole of RM23b in supplementary budget

By Air Kosong

KUALA LUMPUR: The government tabled in Parliament today a supplementary supply bill seeking more than RM23 billion for additional funds amid looming financial crisis hitting Malaysia. The bill, tabled by Prime Minister Najib Tun Razak under his capacity as Finance Minister after question time, asked for an addition of RM23,111,111,000 to the RM232.8 billion 2012 budget. He said the extra amount was for the second half of this year.

However, he did not elaborate where the additional funds would come from. Prime Minister Najib Tun Razak has been under pressure to tackle the country’s government debt to GDP ratio, which stands at 53.8% when he launched its 2012 budget last October. As an aftermath of Greece’s default in January 2012 and the subsequent global recession, Malaysian economy shrank 2% in first quarter 2012. This is on the back of an economic forecast of 5.5% growth for 2012 in its 2012 budget. Analysts has since projected the economy in the territory of -2% and -5% for 2012. 

Just last month, Standard and Poor’s downgraded Malaysia’s credit rating to “CC-“, which reads “currently vulnerable and dependent on favorable business, financial and economic conditions to meet financial commitments”. This brings the costs of borrowings go up significantly, raising doubt on how this additional RM23 billion to be financed.



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