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Govt expenditure to rise to RM265.9bn this year

KUALA LUMPUR, Oct 27 (Bernama) -- Federal government expenditure in 2017 is expected to increase 5.4 per cent to RM265.9 billion, but its share to the Gross Domestic Product (GDP), is estimated to decline to 19.8 per cent, said the Ministry of Finance (MOF).

In its Economic Report 2017/2018, the MOF said of the RM265.9 billion, a sum of RM219.9 billion (82.7 per cent) was allocated for operating expenditure (OE), and the balance RM46 billion (17.3 billion) for development expenditure (DE).

"The government remains committed to prudent and efficient spending to strengthen its finances by reprioritising programmes and projects, as well as reducing discretionary expenses, without affecting public service delivery," it added.

The report was released in conjunction with the tabling of the 2018 Budget today in Parliament by Prime Minister Datuk Seri Najib Tun Razak, who is also Finance Minister.

The MOF said THE OE is expected to increase moderately by 4.6 per cent to RM219.9 billion or 16.4 per cent of GDP (2016: -3.1 per cent; RM210.2 billion; 17.1 per cent) to cater for higher spending requirement, mainly for emoluments, supplies and services and debt service charges.

Emoluments are expected to increase 7.8 per cent to 78.8 billion and remain the largest component of OE at 35.8 per cent of the total, while retirement charges, representing 10.8 per cent of total OE is expected to increase 12.5 per cent to RM23.6 billion.

The increase is due to implementation of two salary increments and minimum pension payment, respectively, beginning July 2016.

For supplies and services (14.8 per cent of total OE), it is expected to increase 8.6 per cent to RM32.6 billion (2016: 14.3 per cent; -17.3 per cent; RM30.1 billion).

The increase is partly attributed to maintenance charges following the completion of several development projects.

Meanwhile, on subsidies for goods and services, incentives and social assistance, it is projected to decrease 6.5 per cent to RM23.1 billion (2016; -9.5 per cent; RM24.7 billion).

The MOF said the decline is mainly due to rationalisation of the cooking oil subsidy for a one to five kilogramme bottle and implementation of weekly-managed float system for fuel prices to minimise the lag effect of daily crude oil price changes.

"These measures are expected to contribute to a savings of about RM1.2 billion in 2017," it said.

The total expenditure for the economic sector is estimated at RM25.9 billion with the focus on infrastructure, entrepreneurship and industrial development, as well as poverty alleviation.

With the transport subsector accounting for the largest share of RM10.7 billion, an increase of RM2.9 billion from 2016 is primarily for airports and ports maintenance, road, railway and bridges construction and maintenance.

The social sector on the other hand received an increase of RM1.7 billion to RM12.1 billion from RM10.4 billion in 2016.

The allocation focuses mainly on education, building and maintenance of schools, higher learning and training institutes, as well as research and development and vocational training.



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