PETALING JAYA, 21 October AmBank Group expects Budget 2017 to provide incentives for the small and medium enterprises (SMEs) as well as the bottom 40% (B40) and middle 40% (M40) household income groups.
“SMEs form the crux of the economic activity in Malaysia and it is our hope that prudent incentives are put in place for this business segment,” group CEO Datuk Sulaiman Mohd Tahir said in a statement yesterday.
“Also given current socio-economic conditions, we expect the introduction of targeted incentives for households to address the rising cost of living. This is particularly for the M40 category consisting of those whose salary bracket falls between RM3,860 and RM8,319 per month as well as the B40 category whose salary bracket is RM3,855 and below,” he added.
However, while such incentives may be necessary on a short-term cycle, he also highlighted the need to learn from the performance of past incentives in order to determine efficacy and curtail wastages.
“Hence, while it is expected that it will be a people-centric Budget on Oct 21, the year 2017 looks to be a year to exercise a stronger measure of prudence.
“Whether it is national fiscal policy or in business, cost optimisation and effective utilisation of capital is the route that needs to be taken in order to be formidable in the face of trying conditions,” said Sulaiman.
The bank said that Malaysia’s fiscal performance has been improving since July 2016 compared with the first half of 2016, with the 3.1% budget deficit target for 2016 likely to be attained.
For 2017, it expects a marginally lower fiscal deficit target of 3% to gross domestic product on the back of stabilising commodity prices, expectations for moderate improvement in global growth next year and ongoing fiscal consolidation.
“Initial signs indicate that business and consumer sentiments are improving moderately while the overnight policy rate cut also demonstrated a marginal pickup in loans from businesses and households alike. This indicates an improvement in confidence levels,” it said.
— THE SUN