M'SIA ON TRACK TO REDUCE BUDGET DEFICIT TO 5.6 PCT

PUTRAJAYA, May 14 (Bernama) -– Malaysia is on track to reduce its budget deficit to 5.6 per cent this year, said Prime Minister Najib Tun Razak.

"We are on track but we will be slightly lower. We will see how thing goes
but we are commited to driving down the budget deficit," he told reporters after
announcing the first-quarter Gross Domestic Product (GDP) figures here today.

Last year, Malaysia's budget deficit was 7.0 per cent of GDP.

Najib, who is also Finance Minister, Thursday announced a 10.1 per cent GDP
growth for the first-quarter of the year, the highest registered in 10 years,
when compared with the 11.7 per cent registered in the first quarter of
2000.

The country's GDP forecast for the year was also revised to 6.0 per cent
from an earlier estimate of between 4.5 per cent and 5.5 per cent.

Asked whether the revised GDP was achievable, Najib said: "There is little
evidence of a possible contagious effect. I think we will be able to achieve the
figure of 6.0 per cent this year. God willing."

To another question on whether the government might roll back fuel and food
subsidies due to the higher GDP growth, the prime minister said it was committed
towards reducing subsidies.

"We will implement (subsidies) in a gradual basis and take care of the
vulnerable group.

"We'll make sure any revision will be as painless as possible, he said,
adding that the government would see how things develop first before any
revision is undertaken.

Saying that it was important to ensure Malaysia's economic recovery was on
track, Najib added any increase or savings would be used for productive
investment.

"This is important because when we roll back subsidies on a gradual basis,
it is with the intention of using the additional savings for productive
investment which will lead to higher growth rates, hopefully," he said.

–- BERNAMA