KUALA LUMPUR, Oct 11 - Malaysia's government on Friday unveiled a smaller budget for next year but flagged a wider fiscal deficit than previously targeted and proposed new incentives to support growth and attract foreign investment as the U.S.-China trade war drags on.
To help spur activity, it projected a fiscal deficit of 3.2% of gross domestic product , larger than an initial target of 3% but lower than this year's 3.4%. "Domestic demand will anchor growth with the external sector expanding moderately against the backdrop of a challenging global environment," the government said in its Economic Outlook report, released along with the second budget of Prime Minister Mahathir Mohamad's ruling coalition.
Revenue is forecast at 244.53 billion ringgit in 2020, down 7.1% from this year's projection. Unlike this year, there will be no repeat of a 30 billion ringgit one-off payout to the government by state energy firm Petronas.The government's operating budget will drop sharply to 241.02 billion ringgit next year from 262.26 billion ringgit allocated for this year.