KUALA LUMPUR: HSBC Global Research expects Malaysia's revised fiscal target of 3.2 per cent from the original target of 3.0 per cent, for this year to be achieved.

The research house, however, said it would require reduced operational spending and efficient implementation of the proposed economic measures.

"For 2015, the government assumes that crude oil would average US$55 per barrel versus an earlier assumption of US$110 per barrel and the lower oil prices are likely to reduce fiscal revenues," it said in a note today.

The research house said to partially offset the shortfall, the government would encourage more companies to register for the six per cent Goods and Services Tax (GST) to be implemented on April 1.

"This will contribute an additional RM1 billion to the GST collection with a further RM400 million accruing from the collection of dividends from government-linked companies and government-linked investment companies.

"We also take comfort from the fact that to achieve this revised budget deficit target, it will be operating rather than development spending that will be cut," it added.

On Tuesday, Prime Minister Datuk Seri Najib Tun Razak said development expenditure would remain at RM48.5 billion and projects such as the high-speed rail link to Singapore and the Pengerang Petrochemicals Complex in Johor will continue.

Najib also emphasised that the government intended to continue with fiscal reforms and consolidation.

- Bernama