COMMENT | The recently re-tabled 2023 budget by Prime Minister Anwar Ibrahim, who is also the finance minister, was an astute document which emphasised continuity, reassured markets, and introduced small positive changes to signal future policy direction.

Increasing the fiscal space

Anwar and his team at the Finance Ministry very astutely adjusted the expected revenue and projected operating expenditure upwards as compared to the previous budget announced by former finance minister Tengku Zafrul Tengku Abdul Aziz, now international trade and industry minister.

The higher-than-expected gross domestic product (GDP) growth of 8.7 percent for 2022 (compared to an initial projection of between 6.5 to 7 percent) allowed the team at Treasury to increase the operating expenditure from RM272.3 billion (under Zafrul’s budget) to RM289.1 billion (under Anwar’s budget) and still announce a decrease in the budget deficit-to-GDP ratio from -5.5 percent to -5 percent.

The higher-than-expected GDP growth in 2022 also resulted in...