Growth may await Penang in the short term, but adapting to Industry 4.0 has to happen now.
According to the World Bank, Malaysia’s economic growth will continue at a moderate pace over the next two years. This goes together with the bank’s expectation of lower capital expenditure growth in Malaysia.
The country’s 2018’s budget deficit is expected to hit 2.8% of GDP (vs. 3% in 2017), and higher expenditure will be offset by an increase in revenue, which is mainly driven by stronger economic growth and the recovery of oil prices. While economic growth for 2018 is projected to reach an impressive 5-5.5%, this forecast is propelled by the positive projection of the global economy rather than by sound fiscal and economic policies at the federal level of government.
The Election Budget
Malaysia has big dreams of becoming a developed nation in the near future, but to have any chance of achieving this, the coordination of operating and development budgets needs to be improved. In the 2018 Budget, as much as 83.6% was allocated for operating expenditure (OE), leaving only 16.4% for development expenditure (DE).
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