Covid-19: Fiscal Challenges Await Most Governments


COUNTRIES ARE LIKENING the Covid-19 pandemic to war and indeed, we are observing wartime spending levels across the globe. Malaysia’s RM260bil fiscal stimulus package PRIHATIN is 17% of GDP, easily one of the largest around. Japan’s is still the largest, coming in at 21%. The US’ is 11%, while Singapore’s stands at 12%. Though RM260bil might seem a colossal sum, the good news is that direct cash injections are only RM35bil, or 2.3% of GDP. The consensus is that this will widen Malaysia’s fiscal deficit, i.e. the difference between the federal government’s revenue and expenditure. The fact that oil prices have ...

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