Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the target is achievable despite the falling global oil prices, which have shed close to 40 per cent in the past five months in its longest string of monthly losses since the 2008 crisis.
“We have also looked into the taxes that we would be receiving from the petroleum industry and we believe this would contribute to the fiscal aim,” he said after officiating at the National Economic Outlook Conference 2015-2016, here, yesterday.
In 2013, Malaysia’s fiscal deficit stood at 3.9 per cent of the GDP.
The benchmark Brent crude oil steadied below US$73 a barrel (RM249.66) yesterday, holding onto a rally from five-year lows after oil producers failed to curb production despite a supply glut.
On the inflation, Ahmad Husni said the inflation for next year is expected to increase temporarily to between four and five per cent due to the Goods and Services Tax (GST) implementation.
“We will have to take into account the GST implementation on April 1 next year. However, we have not conducted a study on it yet,” he said.
The minister said despite the lower oil prices, the inflation rate will increase next year from 3.3 per cent this year.
Earlier in his keynote address, Ahmad Husni said only about 24 per cent of the entire fuel subsidy went to Malaysian households, with the remainder benefiting mainly the business sector.
“These subsidies were unfair to the poor,” he said, adding that on average, assuming all things remain equal, regardless of the income, each household receives a subsidy of RM625 per year for electricity and RM885 for fuel.
“In reality, however, it was the high-income households that enjoyed both of these subsidies, receiving 80 per cent of both subsidies,” he added.