Call for more tweaks in subsidies, reforms

(Business Times) – REACHING TARGETS: Moody’s says fuel price hike a positive step but more adjustments to Malaysian govt fiscal plan needed

THE fuel price hike is a positive step but more tweaks in subsidies and other fiscal reforms are needed if the government is to address its overall fiscal deficits.

Global rating agency Moody’s Investors Service Inc said the lack of additional reforms would place the government’s fiscal targets “increasingly out of reach”.

The government announced a 20-sen increase in RON95 petrol and diesel prices on Monday as it seeks to maintain a full-year surplus in the operating budget, while keeping this year’s overall fiscal deficit under four per cent of gross domestic product (GDP) growth.

Moody’s, which has forecast Malaysia’s current fiscal deficit at more than four per cent of GDP, pointed that significant adjustments to the fiscal framework that broaden the tax base and reduce the subsidy burden have been largely absent since 2008.

Read more at: http://www.btimes.com.my/articles/20130904232853/Article/