Najib: Budget 2014 to focus on domestic growth
Budget 2014 to be tabled in Parliament by the Prime Minister on Oct 25 will focus on strengthening the domestic economy and cushioning it from any ill-effects triggered by global economic uncertainties and the continued partial government shutdown in the United States.
Datuk Seri Najib Tun Razak, who is also Finance Minister I, said the core foundation of the Budget will be to ensure the domestic economy remained resilient and that the country could register reasonable growth despite the expected global slowdown.
“So, one of the key elements on the Budget will be to strengthen domestic and national resilience,” he told the Malaysian media after the closing of the 23rd Asean Summit and related summits here yesterday.
Asked if the government would not be able to meet Cuepacs’ request for a two months’ bonus and a review of allowances for the 1.2 million civil servants, Najib said he could not tell for now.
“I need to see our accounts first and ensure we are on track to reduce the fiscal deficit and, at the same time, strengthen our fiscal and macro position,” added the Prime Minister, who, at the East Asia Summit earlier, expressed concerns if the US’ Quantitative Easing policy could impact negatively on the world economy.
(Quantitative Easing is a situation where a government’s monetary policy increases the money supply by buying government securities or other securities from the market and then floods the financial institutions with capital to promote increased lending and liquidity).
“I told the summit we need to give a clear signal on the QE process by the US Federal Reserve Bank as we do not know how much money will be involved in the process and its timing (how long it will be carried out),” said Najib, expressing hope that feuding parties in the US will reach a compromise and resolve the matter soon.
“We are hoping for the matter to be quickly resolved so that there will not be a situation where the US economy gets worse or even goes into a recession.
“If that happens, it will have a severe impact on the global economy,” he said.
Asked on the Asean-India Summit which he had also attended earlier yesterday, Najib said both parties hoped to sign a free trade agreement on services and investments by the end of the year.
He described India as an important trading partner for Asean with bilateral trade totalling US$71bil (RM234bil) last year.
“We want to enhance trade ties with India to a strategic level and set a target to increase bilateral trade to US$100bil (RM330bil) by 2015,” he said, adding that an Asean-India Centre will be set up to promote business and other cooperation.
In another development, Asean leaders have told Indonesia to ratify the Asean Agreement of Transboundary Haze Pollution soon.
Indonesia is the only Asean nation yet to ratify the 2002 treaty to prevent haze in the region.
Sultan Hassanal Bolkiah, chairman of the 23rd Asean Summit, said the leaders welcomed Indonesia’s commitment to ratify the agreement but expressed hope that it would be done “at the earliest time”.
Indonesia, Singapore and Malaysia held informal talks on the haze at the sidelines of the summit on Wednesday.
At the closing of the Summit, Sultan Hassanal handed over the chairmanship of Asean for 2014 to Myanmar leader U Thein Sein.