Can Budget 2016 strengthen Malaysia against external economic headwinds?

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Budget 2016 has been touted as a people’s budget. We decided to examine if it is capable of weathering external economic headwinds.

In the past year or so, the Malaysian economy has been affected by two main external headwinds: the fall in commodities prices dented the country’s finances, while the possibility of the US increasing its interest rates caused some repatriation of foreign investment funds, affecting investment climate and the Ringgit’s value against major currencies.

Budget 2016 includes many plans for action, including nine high-impact projects worth RM6.7bil. However, can it strengthen Malaysia’s defences against external headwinds, given that the US Federal Reserve has hinted that interest rates are projected to rise?


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