COMMENT The last time the Budget 2016 was recalibrated in January this year, amongst the important targets was to ensure that the the budget deficit at 3.1 percent of Gross Domestic Product (GDP) would be maintained as set in Budget 2015.

With the global crude oil experiencing a precipitous fall then, the recalibration was aimed at averting a budget deficit to GDP of 4.0 percent. It was also to avoid a sharp worsening of business and consumer sentiment. Not the least was to avoid a sovereign rating downgrading.

For the record, RM9 billion expenditure cut were put in place as to keep budget deficit at 3.1 percent of GDP (at RM39 billion). Total revenue that was projected to drop by approximately 1 percent for the whole of 2016, actually fell by almost 10 percent in the first half of 2016.

Revenue collected in the first six months of RM96 billion is actually about 44 percent of total revenue projected for the whole year of 2016. Hence there is about RM17 billion shortfall, in terms of revenue for the entire year. Not too bad but still worrying to say of the least.

But more disturbing is on the expenditure-side. Operating expenditure has expanded by 2.1 percent and 30 percent in terms of net development expenditure in the first six months. While arguably needed in term of supporting a slowing economy and maintaining growth, this has surely caused concern. Total net expenditure has actually climbed by 5.4 percent in the first half of 2016.

Will the federal government now capable of achieving its targetted fiscal deficit of 3.1 percent of GDP? The twin tasks of raising revenues while managing expenditures would be onerous much as it seems less of an urgency given a slowing global economy and persistent headwinds moving forward in the second half of 2016.

It is perhaps more pertinent to address the upcoming budget so as not to repeat perennial problems of the economy. Obsession with macroeconomic numbers including but not limited to growth and budget deficit, has time and again deluded us to believe that we are doing well.

Doing ‘more of the same’ while simply paying lip-service to the need for a ‘higher performing economy’, yet not committed to real structural reforms of the economy, will neither do any good nor appease any sections of the Bottom-40 (B-40) and the Middle-40 (M-40) nor the genuine business community.

Yawning divides both in income and wealth remain unattended, save through ‘cash-handouts’ of Bantuan Rakyat 1Malaysia (BRIM), which is obviously unsustainable in the longer run. Debt-based consumption is arguably ‘deceptive’, both at the domestic and governmental levels.

Finally, while we are very hopeful of escaping the ‘Middle-Income Trap’ soon, we are nonetheless still stuck in our obsession with numbers, which regrettably do not truly represent the real matrix of happiness and prosperity for the citizenry.

DR DZULKEFLY AHMAD is strategy director, Parti Amanah Negara.