MALAYSIA XXXXXXXXXX :Fiscal
Policy :provide data and analysis for the government receipts (types of...

Question

MALAYSIA XXXXXXXXXX :Fiscal
Policy :provide data and analysis for the government receipts (types of taxes, average
tax rate), the government expenditures (by type), the public deficit to GDP
ratio and the debt to GDP ratio. Discuss any significant use of
discretionary fiscal policy (fiscal stimulus package, deficit restructuring…)
during the period.
Monetary
Policy: provide information about the
country’s Central bank. Provide data and analysis for the monetary aggregatesand the interest rates. Discuss any
significant use of monetary policy (changes in interest rates, quantitative
easing…) during the period.

Robert · Accepted Answer

FISCAL POLICY 
The economy of Malaysia grew impressively in 2011, outperforming all forecasts, with 
the domestic growth being driven primarily by high domestic demand. The public 
consumption increased by more than expectations and the fixed investment was also 
upbeat owing to higher investments both by public and private companies. All through 
household consumption expenditure remained strong. It was sustained by several 
factors including consumer credit, firm commodity pricing, and bonus payments.  
Digging into the data for the past 20 years shows that Public Debt-GDP ratio (which 
indicates a country’s ability to make future debt service payments) has remained stable 
at nearly 53% after recording an all time high of 79.5% in December 1990 and a record 
low of 31.8% in December 1997 (with the average being 47.39%).  
Similarly, the government budget deficit to GDP ratio has been dropping consistently 
since 2010 after peaking at 7.4% in December of 2009, and now stands at 5.3% in 2011 
(estimated). The Government Deficit is the net of payments made by government 
(purchases and transfer payments) from the payments received (taxes and other fees). 
Also, the public spending by the Government of Malaysia has increased to 21674 MYR 
Million in May 2012 (as reported by the Department of Statistics, Malaysia) after 
reaching a record low of 12420 MYR Million in February 2005.  
Besides, according to a report published by the World Bank in 2012, the total tax 
revenue as a percentage of the GDP in Malaysia stood at 14.30 in 2010. The Customs 
and other import duties (% of tax revenue) were 1.80 (in 2010). 
It is impressive to note that the real GDP growth rate has become 4.4% in 2012 
(estimated) after dropping to -1.9% in 2009. Such impressive gains have been made 
possible only by the fiscal consolidation undertaken by the government.

MALAYSIA XXXXXXXXXX : Fiscal Policy : provide data and analysis for the government receipts (types of taxes, average tax rate), the government expenditures (by type), the public deficit to GDP ratio...

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