OCBC Bank chief economist Selena Ling said at the broadest level, by pencilling in a 3.2% fiscal deficit target as a proportion of GDP in 2020, he has managed to walk the middle way of some consolidation from 3.4% deficit expected this year and the original 2020 deficit target of 3.0% that he had first telegraphed last year. Any target of heavier consolidation been postponed, to a relatively vague promise of an average of 2.8% “over the medium term," she noted.
The still-high ratio of petroleum contribution might be less of an issue now with a lower built-in crude price assumption but may be an area of focus once more should oil price refuse to cooperate through the course of 2020. "For context, the consensus forecast is at 4.3% while we have a more sanguine 4.2% pencilled in. In his speech, the minister did not spell out exactly how the ambitious growth target can be achieved, but we can surmise that it rests heavily on supporting the domestic consumption," Ling added.
In what is by now a perennial group to be taken care of, no matter who is in power, the budget is also allocating support measures for the civil servants, including an increase in living allowances and easier redemption of accumulated leave days. Given the size of the civil service – at 1.6 million strong, more than 10% of working population – such measures are not to be ignored altogether.
Its a very tricky balancing act..whereby oil and other sources of variable income as opposed to a fixed and obligatory income like tax..But the most unknown variable is the current economic turmoils around the world..which might throw u off balance chedetofficial guanenglim