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2025 Budget focus: Inclusive growth and economic restructuring, says Anwar

Publish date: Tue, 09 Jul 2024, 05:26 PM

PUTRAJAYA: The 2025 Budget must remain focused on achieving the goals set out in the Madani Economy framework, said Prime Minister Datuk Seri Anwar Ibrahim.

The Prime Minister, during his opening remarks at the 2025 Budget engagement session, said these included efforts to "raise the ceiling" and "raise the floor."

Raising the ceiling involves initiatives to restructure the economy to achieve higher targets towards making Malaysia as the leader in the Asian economy, while raising the floor involves efforts to improve the people's quality of life to create quality and inclusive income opportunities.

"Only through rapid, accelerated, and convincing growth can we enhance convenience for the people.

"The third Madani Budget for 2025 will be built on this foundation, aiming to implement continuous reforms to achieve the aspirations of a Madani economy."

He said the Economy Madani framework launched last year remained the foundation for empowering the people and addressing the structural issues of the country.

Anwar, who is also Finance Minister, said several reforms had already been undertaken, including amending the Fiscal Responsibility Act, empowering the Auditor-General, and other ongoing efforts to improve governance.

"This is why we emphasise on raising the ceiling so that economic restructuring can drive growth.

"Creativity, competitiveness, digitalisation, artificial intelligence (AI) exploration and civil service reforms are crucial because we cannot rely on old methods to achieve new goals.

"After raising the ceiling, raising the floor also becomes our main challenge. Otherwise, while we drive growth, the people are being left behind, especially among the urban poor and in the rural areas," he said.

Also present were Finance Minister II Datuk Seri Amir Hamzah Azizan and Deputy Finance Minister Lim Hui Ying.

Meanwhile, Anwar said among the early successes of the Madani Economy framework was when Malaysia's sovereign credit ratings were maintained at A- and BBB+ by S&P Global Ratings and Fitch Ratings, respectively, both with a "stable" outlook.

He said the gross domestic product (GDP) growth for the first quarter of 2024 reached 4.2 per cent, an improvement from the 3 per cent growth in the fourth quarter of 2023. 

Additionally, merchandise exports saw a recovery, growing by 5.2 per cent in the first quarter of 2024 compared to an 8.1 per cent contraction the previous year.

"The FTSE Bursa Malaysia KLCI (FBM KLCI) index surpassed 1,600 points, with the market value of domestic equities reaching a historic high of RM2 trillion.

"Additionally, our approved direct investments in 2023 amounted to RM329.5 billion, 23 per cent higher than in 2022.

He said that the government would focus on high-value-added activities such as electrical and electronics, as well as traditional industries like palm oil, while also advancing digitalisation and automation. 

High-growth sectors, including energy transition and artificial intelligence (AI), would also be targeted, he added.

Anwar also said that the rising cost of living remained a significant concern for many Malaysians. 

"Relatively, essential items like sugar, flour, petrol, diesel, and cooking oil are significantly more affordable in Malaysia than in other countries. However, this does not change the fact that the cost of living still pressures a large portion of the population," he said.

"We must think of new methods to eliminate cartels or monopolies and prevent leakages so that the returns will benefit the people," he said.

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