The sizeable allocation for development expenditure (DE) under the 12th Malaysia Plan (12MP) will be positive for gross domestic product (GDP) growth, economists said.
The DE, if implemented in a timely manner, would have immediate multiplier effects to the economy, they added.
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said in a nutshell, the MP12 had covered a lot of grounds.
"With timely implementation, it could accelerate the economic recovery process," Afzanizam told the New Straits Times.
He said as the government set a target to reduce fiscal deficits between 3.0 per cent and 3.5 per cent by 2025, there would be new taxes to be introduced along the way especially when the economic recovery becomes more sustainable.
He said the development programmes, focus on technology in particular the 4G and 5G network and increase in research and development (R&D) signalled that the government was committed to ensuring that the economy would continue to grow with quality.
"This would lead to demand for highly skilled labours," he added.
Putra Business School associate professor Dr Ahmed Razman Abdul Latif said the 12MP's goal to achieve 4.5 per cent to 5.5 per cent GDP until 2025 was realistic as next year would be the year for more positive economic growth.
However, he said the average household income of RM10,000 by 2025 goal was quite ambitious. This was given that from 2016 to 2020, the increase of household income was less than RM2,000.
"But it can be achieved if the 12MP plan is implemented according to its stated plan and it gets support from all parties, not only from the government but also from private sector as well," he added.
Ahmed Razman said in regards to the focus on bridging the income and wealth gap as well as economic growth between states and regions, it can be achieved by channeling higher DE so that more infrastructure can be built, which can attract investors and traders to operate in those states.
"They would be happy to operate in these states if the infrastructure is up to their standards and they will certainly be experiencing lower operating costs in these states.
"And we hope that there will be an economic spillover or multiplier effect when the investment and transfer of these business operations takes place in those states," he said.
He added that in line with the aspirations of the Vision for Shared Prosperity 2030, Malaysia could not remain in the old notch by becoming a consumer country and must be a competitive country by also focusing on digitisation as one of the economic catalysts.
"This can be done in collaboration with local and foreign investors in terms of bringing in investment and expertise involving high technology into our country so we will be able to produce high income and high skilled household," he added.
Read more here: https://www.nst.com.my/business/2021/09/731462/12mp-covers-vast-grounds-pose-instant-multiplier-effects-economists
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