KUALA LUMPUR, Feb 28 — Fitch Solutions Group (FSG) has lowered Malaysia’s 2023 budget deficit forecast as a share of Gross Domestic Product (GDP) to 4.9 per cent from 5.3 per cent previously, which it said is "somewhat aligned” with the government’s fiscal projections.

In its Country Risk & Industry Research report today, FSG said it expected the country’s 2023 revenue to come in much higher than before, after revenue collection surged by 25.9 per cent in 2022.

"On February 24, Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim unveiled the country’s 2023 budget of RM386.1 billion. This is more expansionary than the RM372.3 billion budget proposed by the former government, which was never passed in Parliament as the lower house was dissolved to make way for general elections.

"Overall, the Anwar government projects a budget deficit of 5.0 per cent of GDP for 2023, marking a narrower shortfall from a revised estimate of 5.6 per cent in 2022,” it said.

FSG said the budget is expansionary overall, with the government announcing a slew of measures to lower the cost of living amid high inflation as well as more progressive taxes.

"Broadly speaking, we have aligned our revenue and expenditure forecasts with the government’s projections for now,” it said. — Bernama