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KUALA LUMPUR, Nov 2 (Bernama) -- The government sector is estimated to record a higher overall deficit of RM51.9 billion or 3.6 per cent of Gross Domestic Product in 2018 after netting off all intra-transfers and net lending.
Under the legal provision, other layers of government can only borrow from or with the approval of the Federal government, said the '’Fiscal Outlook and Federal Government Revenues Estimates 2019 Report'’ released by the Ministry of Finance today in conjunction with the 2019 Budget presented in Parliament today.
“Hence, credit risk exposure is contained within the Federal government level. Thus, the deficit will be financed through accumulated reserves and Federal government borrowings,” the ministry said.
MOF also said the consolidated revenue of the non-financial public corporations (NFPC) in 2018 was estimated to record a slight increase of 1.9 per cent to RM376 billion.
“The growth is contributed mainly by the utility and telecommunications sectors in line with higher demand for utilities and broader customer base,” it added.
Meanwhile, the state governments' total consolidated revenue for 2018 was projected at RM20.6 billion of which RM16 billion or 77.7 per cent was state-generated revenue while Federal government grants made up the remainder.
The consolidated expenditure of state governments are projected to be higher by 21.3 per cent to RM23.5 billion while the operating expenditure was expected to rise by 16.3 per cent to RM11.4 billion largely due to higher emoluments, as well as, supplies and services.
The report also explained that the purpose of reporting consolidated public sector's (CPS) financial position is to estimate the size of the public sector, measure its impact on the economy at the macro level and identify the sources of fiscal risk.
The financial position of CPS was anticipated to record a lower current surplus of RM68.6 billion, due to higher projection of Federal government’s operating expenditure and lower estimates of NFPC’s current surplus,” the ministry added.