Skip to content
Subscriber Only

Ringgit Retreats as Malaysian Budget Woes Add to China Concern

  • Budget deficit may be about 1 percent of GDP in 2020: Najib
  • Foreign funds have sold $4 billion of Malaysia shares in 2015
Updated on

The ringgit fell and stocks retreated as concern Malaysia may miss its target of balancing the budget by 2020 hurt a currency already reeling from a worsening slowdown in China and allegations of corruption against Prime Minister Najib Razak.

The fiscal shortfall may be “in the region” of 1 percent of gross domestic product at the end of the decade, compared with a current deficit of 3.2 percent, the New Straits Times reported Thursday, citing comments by Najib to fund managers and investors in New York. Malaysia derives 22 percent of government revenue from oil-related sources and its finances have been sapped by a 49 percent drop in Brent crude over the past 12 months.