Economic Research | 1 June 2018 | |||
Malaysia | ||||
Economic Update | ||||
GST To SST: Neutral Impact On Fiscal Balance The Government said it is to maintain the budget deficit at 2.8% of GDP for 2018 via a rationalisation in expenditure. This is to mitigate a potential revenue loss caused by the introduction of a SST to replace the GST. Although there is a downside risk from a potential shortfall in corporate income tax collection and, hence, its revenue, we believe the situation remains manageable. Furthermore, we believe the Government should be able to achieve the set budget deficit target. Its clarification on the impact on its fiscal position – arising from a change of the GST to the SST – should help reassure the rating agencies. As a result, we believe Malaysia’s sovereign credit rating is likely to remain intact. Economist: Peck Boon Soon | +603 9280 2163 | ||||
To access our recent reports please click on the links below: 31 May: M3 And Loan Growth Accelerate In April 28 May: From GST to SST_Return Of SST – Impact On Economy And Equities 23 May: Subdued Inflation In April; 2018 Forecasts Slashed 17 May: Slower 1Q GDP Growth; 2018 Forecast Retained 17 May: GST Zero-Rated; Transitioning To SST 14 May: March IPI Growth Steady, GDP Forecast Retained | ||||
Economics Team | ||||
Arup Raha | Group Chief Economist | +65 6232 3896 | ||
Peck Boon Soon | Chief ASEAN Economist | +603 9280 2163 | ||
Vincent Loo Yeong Hong | Malaysia, Singapore | +603 9280 2172 | ||
Ahmad Nazmi Idrus | Indonesia | +603 9280 2179 | ||
Aris Nazman Maslan | Thailand, Philippines , Vietnam | +603 9280 2184 | ||
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