..But economists also raised concerns over the widening deficit for 2009.
Due to the extra spending needed to prop up the economy, the government deficit is being raised to 4.8 per cent of the gross domestic product, from 3.6 per cent previously.
Malaysia has registered a budget deficit every year since 1998.
In other words, the government has been spending more that what it was earning in the last 10 years!
Mr Najib said that the higher decifit of 4.8 per cent is due to the drop in government revenues, from RM176.22 billion to to RM168.7 billion.
Malaysia’s government depends on some 46 per cent of its revenues from petroleum taxes.
The sharp drop in global crude oil prices is thus worrying, economists say. In recent years, the government depends on oil and gas dug up and sold by national oil company Petronas to funds its spending.
Mr Dzulkefly Ahmad, a lawmaker for the opposition Parti Islam SeMalaysia pointed out that the drop in crude oil prices could cause an RM18 billion shortfall in projected revenue.
Due to lower prices, the government could see an estimated loss to the tune of RM18 billion to RM25 billion instead of the RM8 billion predicted by Mr Najib, he claimed.
“The numbers do not jive, whichever way you look at them,” he was quoted as saying by the news website Malaysiakini.
Najib’s proposed widening budget deficit worries economists