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Malaysia Gears for Election-Friendly Budget With Smaller Deficit

The government will probably aim to narrow the budget deficit to 5% of gross domestic product.

The government will probably aim to narrow the budget deficit to 5% of gross domestic product.

Photographer: Ian Teh/Bloomberg

As Malaysia’s Prime Minister Ismail Sabri Yaakob prepares his re-election bid, his administration’s final budget on Friday offers him a rare opportunity to win over voters with spending proposals that many expect will be heavy on feel-good factor and light on new taxes.

Ismail, who is under pressure from his United Malays National Organisation party to call elections before the year is out, needs to get the budget math right before the vote. For that, he must reconcile the goal of narrowing the fiscal deficit to keep investors’ faith in the economy with the need for shielding the masses from high inflation, while ensuring economic growth remains sustainable.