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A view of Kuala Lumpur’s skyline with Petronas Twin Tower at the centre as the lights switched on after Earth Hour in Kuala Lumpur, Malaysia March 25, 2023. REUTERS/Hasnoor Hussain/ File Photo Acquire Licensing Rights
KUALA LUMPUR, Oct 12 (Reuters) – Malaysian lawmakers have approved legislation aimed at improving fiscal responsibility, as the government looks to better manage public funds, reduce debt, and boost accountability.
The Public Finance And Fiscal Responsibility Law was passed late on Wednesday.
The Southeast Asian country’s coffers have come under strain in recent years, following a multibillion-dollar financial scandal at state fund 1MDB and increased subsidy spending to tackle rising living costs.
The new law sets out a series of targets to be achieved within three to five years, including lowering the fiscal deficit to 3% of gross domestic product (GDP) or less, and reducing debt levels to 60% of GDP or less, Deputy Finance Minister Ahmad Maslan said on Wednesday.
The law also requires annual development spending to be at least 3% of GDP, while government guarantees would be capped at 25%.
The law’s passage comes as the government prepares to present its budget for 2024 on Friday.
Analysts expect the budget to cut subsidies for the wealthy and prioritise aid for low-income households amid fiscal strains.
Reporting by Rozanna Latiff; Editing by Martin Petty
Our Standards: The Thomson Reuters Trust Principles.
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