- Prime Minister Datuk Seri Najib Razak announced the dissolution of the Parliament yesterday, paving the way for the 13th general election. The last general election was held on March 8, 2008.

- The EC will meet in the next few days to set the date for nominations and polling that must be held within the next 60 days. Depending on the EC’s schedule, the general election could be as early as April 20.

- With the Dewan Rakyat dissolved Wednesday, a 60-day time limit to polling day would mean that the last date upon which voting must be done is on June 3.

- During a televised speech yesterday, the Prime Minister hailed the current government’s achievements, which he said include the positive evolvements in the economic, social and political aspects of the country.

- Notwithstanding the elections, we do expect the domestic fundamentals to stay intact on the back of the stable growth environment. Domestic demand will continue to be well-anchored for growth during this fiscal year. Note that real GDP had advanced by 5.6% totalling RM749.1bn in 2012 led by the aggregate domestic demand growth of 10.6%.

- As a recap, the robust investment growth last year was mainly due to the commencement and progress made under the private-driven initiatives. With the auspices of the government’s Economic Transformation Programme, gross fixed capital formation rose by a cumulative 19.9% (or accounting for 26.7% of GDP).

- The investment by the private sector was the key driver of domestic growth in 2012, contributing 15.5% to GDP (or registering a growth of +22% YoY). Owing to a boost in capital spending by public enterprises, public investment had registered a healthy growth of 17.1% YoY in 2012.

- However, a major milestone post-election will involve the government’s fiscal management to ensure sustainability in terms of public finances. The country’s fiscal shortfall is expected to be reduced to 3.0% of GDP by 2015. In comparison, deficit level came in at 4.5% in 2012 and is anticipated at 4.0% for 2013.

- Also, the rationalisation of subsidies will likely resume in 2H13 to facilitate the long-term national transformation plan and fiscal consolidation efforts ahead. In line with the gradual subsidy cuts, prices are expected to escalate while inflation rate will likely outpace the moderate 1.6% growth seen in 2012.

Source: AmeSecurities