'Malaysia to narrow deficit goal in 2013 Budget'

Malaysia's government will narrow its deficit target in the 2013 budget
from about 4.7 per cent of gross domestic product this year, said Ahmad
Husni Mohamad Hanadzlah, the country's second finance minister.

The
government wants to reduce the deficit to 3 per cent of GDP by 2015,
Ahmad Husni was cited as saying in a Bernama report today. Wan Nurzila
Wan Abdul Rahman, his press secretary, confirmed his comments.
Malaysia's Cabinet has approved the draft budget, the minister said.

Prime
Minister Najib Razak last year unveiled a record RM232.8 billion (US$75
billion) budget, pledging to increase civil servant salaries and remove
primary and secondary school fees.

Standard and Poor's said
this month Malaysia's large public investments in the past decade have
adversely affected its fiscal position, and that future rating actions
are dependent on the government's progress on the budget gap.

"A
downgrade in sovereign credit could affect investor confidence, leading
to weakness in the country's currency and pushing up borrowing costs,"
RHB Research Institute Sdn Bhd said in a Sept. 6 report. A smaller
deficit "will likely be made possible as we expect the government to
strengthen and tighten its tax administration to squeeze more dollars
from corporates and to plug some of the leakages in custom duties."

RHB
estimates Malaysia's budget shortfall will narrow to 4.4 per cent of
GDP, or RM43.9 billion, in 2013, after shrinking to 4.6 per cent of
GDP, or RM43.6 billion in 2012.

Najib has also boosted handouts
for the poor to shore up support ahead of a general election that must
be held by early 2013. Malaysia is scheduled to release its 2013 budget
Sept. 28. -- Bloomberg