Budget 2012, to be tabled in Parliament on Oct 7, is expected to boost aggregate demand with industrial upgrading and business support expected to remain high, says RAM Holdings Bhd. RAM said next year's budget was expected to focus on tackling the rising
cost of living, especially for the low-to-middle-income segment, and enhance
efficiency through market liberalisation, as well as, easing business costs.
"The public remains more concerned about the rising cost of living, although
statistics seemingly indicate that inflation is at manageable pre-recession
levels," it said, adding that food inflation has been rising faster than overall
inflation, at around five per cent. As a result, RAM said wealth distribution to lower income households, such
as cash transfers, could be considered by the government in its 2012 Budget
proposals.
"This programme would certainly be welcomed as it would improve
affordability for the lower economic strata while adding a multiplier effect to
aggregate demand within the domestic economy," it said in a statement today. It also said the government was expected to introduce more measures to
render business operations more cost-effective while address impediments against
conducting business and investments. "This is anticipated to improve the domestic investment climate and entice
more foreign direct investments," it added. The rating house said the government was also anticipated to enhance its
revenue-generating capability next year to finance its socio-economic
objectives for the year.
"While some revenue components are anticipated to remain stable relative to
growth, such as domestic corporate taxes, there may be substantial changes in
other income sources next year," RAM added. It expected excise duties to be increased as the government's financing
needs were forecast to heighten next year. -- Bernama