KL to tighten govt spending next year<\/p>\n
KUALA LUMPUR (AFP): Malaysia would tighten government spending
\nin its calendar 1998 budget to avoid wastage and ensure quality
\ngrowth, Deputy Prime Minister Anwar Ibrahim said yesterday.<\/p>\n
The government would also work towards strengthening the
\ncountry's economic structure and enhancing its economic
\nmanagement, said Anwar, who is also finance minister.<\/p>\n
\"In line with this goal, the country's budget and financial
\npolicy is to continue to save and be disciplined,\" Anwar was
\nreported as saying by Bernama news agency.<\/p>\n
He said the country's sound financial system would have to be
\nprotected through constant supervision by the central bank and
\nefficient internal management in the banks.<\/p>\n
This was to avoid the pitfalls of overexposing bank loans to
\nthe growing property sector and low-quality loan growth as
\nexperienced by neighboring countries, he added.<\/p>\n
Anwar was referring to the central bank's move in April to
\nimpose lending limits on properties and share markets to prevent
\na bubble economy but analysts warned it could backfire and choke
\nthe property market.<\/p>\n
Malaysia was projected to achieve an eight percent growth this
\nyear after logging growth of more than 8.8 percent consecutively
\nover the past nine years, he said.<\/p>\n
The inflation rate for the five months to May improved to 2.9
\npercent from 3.5 percent in the previous corresponding period
\nwhile the country's balance of payment for the four months to
\nApril showed a small deficit.<\/p>\n
He said the country's debts were presently at a low level with
\na high level of reserves while the banking system was sound with
\na declining ratio of bad debts.<\/p>\n
As such, the International Monetary Fund had labeled
\nMalaysia's economy as experiencing \"high quality growth\" which
\nhad benefited the nation and reduced poverty, he added.<\/p>\n
Anwar earlier this month promised to take a middle line on
\ntaxes in his October budget, saying that the government would
\nadopt a moderate path to promote economic growth and encourage
\nforeign investment.<\/p>\n
Economists warned the government may have to devote more
\nserious attention to overheating problems which had led to a big
\ndeficit in the nation's current account.<\/p>\n
The central bank had predicted the country's current account
\nto record a slightly larger deficit of 14.8 billion ringgit
\n(US$5.92 billion) this year.<\/p>\n
The deficit had narrowed significantly to 13 billion ringgit
\nlast year from 18.7 billion ringgit in 1995.<\/p>",
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