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Observing Malaysian Social Media

How has the government managed the budget surplus in the last 16 years?

This graph shows the budget surplus trend as a percentage of GDP from 1996 – 2012. Since 1998 there has been a budget deficit.

A budget deficit occurs when the government spends more than it receives in revenue. Deficits are financed by borrowing, which increases public sector debt. This is not necessarily a bad thing, as government spending can help stimulate economic growth and benefit society through welfare, healthcare and measures dealing with job loss and owning property. This can become necessary during a recession.

What is important for voters is ensuring that the government works to reduce the deficit, so it does not remain high or increase over a sustained period. This can be seen from 2000 – 2007. The original budget deficit estimated for 2009 was 3.6%. It ultimately turned out to be 7.0%. Why?

In 2008/2009 there was a global recession and Malaysia experienced negative GDP growth and lower projected revenue. The export-focused manufacturing sector was the hardest hit. The government implemented stimulus packages (RM 67 billion) and other measures to help the economy. This brought the economy from a negative GDP growth of -1.6% in 2009 to a positive growth of 7.2% in 2010 (5.4% when compared to 2008 GDP figure).

Barisan Nasional has allocated RM 232.8 billion for Budget 2012, and aims to bring the deficit down to -4.7% of GDP.

Pakatan Rakyat has allocated RM 220.5 billion for Budget 2012, and aims to bring the deficit down to -4.4% of GDP.

Ahmed Kamal
12 October 2011

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Figures used in this graph:

Format: Year – Deficit (% of GDP)

1996 : 0.7
1997 : 2.3
1998 : -1.8
1999 : -3.2
2000 : -5.8
2001 : -5.5
2002 : -5.6
2003 : -5.3
2004 : -4.3
2005 : -3.6
2006 : -3.3
2007 : -3.2
2008 : -4.8
2009 : -7.0
2010 : -5.6
2011 : -5.4
2012 : -4.7

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Written by politweet

October 12, 2011 at 12:39 am

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