Datuk Seri Najib Razak’s confidence that Putrajaya was in full control of the country’s economy by revising the national budget was met negatively by investors, said opposition party DAP. – The Malaysian Insider file pic, January 21, 2015.Datuk Seri Najib Razak’s “public relations" attempt to show he was in full control of the national economy fell flat as the stock market and the ringgit continued to decline after the revised Budget 2015 was announced yesterday, said the DAP.The opposition party’s national publicity chief, Tony Pua, today said despite the prime minister’s repeated assertion yesterday that the country was not in a crisis, investors remained unconvinced.“The Bursa Malaysia’s Kuala Lumpur Composite Index (KLCI) fell 0.18% or 3.2 points today to 1750.11. The muted response is deafening in the light of the fact that the KLCI had already declined more than 100 points from 1855 on October 31, 2014, less than 3 months ago," said Pua in a statement.He added that Najib’s confidence that the exchange rate would adjust over time to reflect strong economic growth was met with the ringgit plunging to its weakest since April 2009.“The ringgit weakened 0.9% to a low of 3.6030 a dollar after the prime minister’s statement, dumping the currency to its weakest level since April 2009.“This was despite him making light of the substantial depreciation by claiming that 'almost all currencies in the region have softened against the US dollar since September 2014’," said Pua.He added that global ratings agency Fitch Ratings immediately responded to Najib’s speech by announcing that it was likely to downgrade the country’s sovereign rating.
Pua (pic, right) said this proved the agency was not convinced by the finance minister’s argument that Malaysia revised deficit target was no cause for concern.Najib, in revising the target deficit for 2015 from 3.0% to 3.2%, yesterday said it was still lower than the 2014 deficit of 3.5%.“Fitch Ratings did not buy the finance minister’s optimism and responded instantly that 'the negative outlook indicates that Fitch is more likely than not to downgrade the rating of the sovereign’.“Clearly, the Budget 2015 revision and policy adjustment announced by the prime minister fell far short of what was necessary to meet the challenges of the new financial landscape of low oil prices between US$40 to US$50 a barrel," said Pua.He urged the prime minister to convene an emergency parliamentary session to debate the revisions of the budget, adding that this would help the Cabinet adopt stronger and better thought strategies to avert any economic crisis.Pua took Najib to task yesterday for his “unilateral" revision of the national budget after it had been approved by lawmakers.He said it showed Najib treated Parliament as a “rubber stamp" for decisions made by the “dictatorial" executive.Najib announced a RM5.5 billion cut to the RM223.4 billion operating expenditure, which only constituted a 2.2% cut.The fiscal deficit target of 3% of the gross domestic product (GDP) for the year was also revised to 3.2%.Among the saving strategies Najib announced in the revision were deferring the 2015 National Service to enable the programme to be reviewed and enhanced; and optimising outlays on supplies and services, especially overseas travel, events and functions and use of professional services.Najib said the transfers and grants to statutory bodies, government-linked companies, and government trust funds, particularly those with a steady revenue stream and high reserves, would be reviewed.He added that Putrajaya would intensify domestic tourism and postpone the scheduled electricity tariff and gas price hikes for the industrial sector this year. – January 21, 2015.
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