CIMB: Budget 2016 realistic

by **Cals** Tue 27 Oct 2015, 00:03

CIMB: Budget 2016 realistic

By Yimie Yong / theedgemarkets.com | October 23, 2015 : 9:12 PM MYT

KUALA LUMPUR (Oct 23): [size=16]CIMB Group Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 1.65, Fundamental: 1.05) said Budget 2016, which was tabled at Parliament this eveing, is realistic, as the government continues with the right economic structural reforms, while ensuring the well-being of the people.

In a statement today, the banking group said Budget 2016 is moderately expansionary, with the government continuing its agenda of balancing ‘capital’ and ‘people needs' against a challenging external and domestic economic backdrop.

“The macro-economic assumptions of Budget 2016 are realistic, and therefore achievable,” said CIMB Group chief executive officer, Tengku Datuk Zafrul Aziz.

He noted the Malaysian economy is projected to post more moderate growth in 2016 than 2015, but still highly respectable, with GDP growth projected at the 4.0% to 5.0% range.

“Exports are seen picking up in 2016, though imports will also rise in line with a projected improved performance in investment. Trade and current account surpluses, however, will narrow in 2016, and inflation is seen little changed in year-average terms.”

Zafrul said the 2016 Budget is well-crafted within the financial constraints that the government faces.

“The government has demonstrated commitment to focus spending on development expenditure, without compromising on its fiscal consolidation objective, by raising revenue from higher tax collections and capping operating expenditures,” he added.

With the decline in oil revenue, Zafrul noted the government must continue with the right economic structural reforms and ensure the well-being of the ‘rakyat’.

“Hence, we are very pleased to see that the targeted spending plan and proposed fiscal measures detailed in the Budget 2016, are expected to provide additional measures to support domestic demand and the overall well-being of the rakyat, ensuring that the country is on track to meet the development targets set out in 11th Malaysia Plan (2016–2020), and to balance the budget and cut public debt by 2020.

“Overall, we think the budget is realistic and would act as a near-term catalyst on our path towards achieving the Vision 2020 goals,” said Zafrul.
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