KUALA LUMPUR, Oct 15 - Malaysia is set to unveil further subsidy reductions and introduce new taxes as part of its 2025 budget, aiming to bolster its fiscal position amid declining government revenues. Prime Minister Anwar Ibrahim will present the spending plan in parliament on Friday, focusing on fiscal consolidation and economic growth while addressing rising living costs.
Analysts anticipate the introduction of a tax on high-value goods and sugar-sweetened beverages, although a broad-based goods and services tax is not expected to be reinstated. The government projects a decline in dividends from national energy firm Petronas due to falling crude oil prices, with contributions expected to drop to 32 billion ringgit ($7.45 billion) for 2024, down from 40 billion ringgit in 2023.
The government is likely to revise its economic growth forecast for 2024 to between 4.5% and 5.1%, up from the previous range of 4% to 5%. The central bank does not expect inflation to exceed 3%, while the economy grew by 5.9% in the second quarter compared to the previous year.
Additionally, the budget is expected to include adjustments to subsidies for RON95 petrol, sugar, and white rice, following the removal of blanket subsidies for diesel fuel and electricity earlier this year. The fiscal deficit is projected to narrow to between 3.5% and 3.9% of GDP.
HONG KONG, Oct 15 - Hong Kong is anticipated to announce new measures aimed at revitalizing its economy during the annual policy address on Wednesday. Among the proposed measures is a reduction in liquor tariffs, as the city seeks to recover from the economic impacts of the pandemic.
Hong Kong's economy is projected to grow between 2.5% and 3.5% this year, following a 3.3% expansion in the second quarter. Despite a rebound in tourism, with an expected 46 million visitors in 2024, retail spending remains sluggish, and capital outflow continues to pose challenges.
In a recent meeting, China's official on Hong Kong affairs emphasized the need for reforms to stimulate economic growth, urging the local government to unite various sectors of society. Chief Executive John Lee's upcoming address will focus on economic development and improving living standards, alongside potential initiatives to phase out sub-divided flats criticized for their poor living conditions.
Lee is also under pressure to enhance the real estate market, which has seen significant declines, and may propose cutting liquor taxes to attract more business to the city.