Gov’t not revising growth, deficit targets despite stable oil prices

The government is not planning to revise the gross domestic product (GDP) and fiscal deficit targets, although global crude oil prices have stabilised at around US$45 per barrel and above the US$35 mark set for the 2016 Budget, says Treasury secretary-general Mohd Irwan Serigar Abdullah.

“It’s still premature. We don’t know whether the price will remain this stable. We are watching closely (the movement of oil prices) and will maintain the GDP growth target.

“But in terms of the fiscal deficit, we have some space, as (with) higher oil prices we can undertake more programmes and projects,” he told a press conference after launching Malaysia Debt Ventures Bhd's (MDV) Elevate programme in Kuala Lumpur today.

Meanwhile, under the 2016 recalibrated budget, the economy is projected to grow between 4.0 to 4.5 percent this year, based on the assumption of oil prices ranging between US$30-US$35 per barrel.

The government too aims to narrow its fiscal deficit to 3.1 percent of the GDP from 3.2 percent last year.

Mohd Irwan said there were many factors influencing the movements of crude oil prices such as, current developments in the United States, where oil producers were rushing back to the market.

“We are afraid that shale gas and shale oil (producers) may come back into the market due to the higher prices. The government will not resort to any rationalisation or stimulus measures this year,” he added.

At the press conference, Mohd Irwan was also asked to comment on the appointment of the new Bank Negara Malaysia governor.

He said Muhammad Ibrahim was the best candidate following his status as deputy governor and in having served for a long period with strong experience.

He also described him as an intelligent and very knowledgeable leader, always coming up with brilliant ideas, capable of meeting the organisation’s goal.

On talk that the appointment of Muhammad had provided some insight on the continuity in policies of the country, Mohd Irwan said regardless of whoever was named as governor, the government did not have any intention of changing key policies.

Succeeding Zeti Akhtar Aziz who retired, Muhammad, a Harvard graduate, will hold the post for five years, effective May 1.

- Bernama