As Tay’s interview went viral, Tony Pua, Malaysian finance minister Lim Guan Eng’s political secretary, went on the warpath. Pua pointed out that it was, in fact, Malaysia’s fiscal account that was in deficit, not its current account. Pua also noted that Malaysia had a diversified economy, and was not dependent on oil. However, oil and gas revenue is forecast to account for 30.9% of government revenue in 2019. Excluding a one-off special dividend from Petronas, the underlying contribution to government revenue from oil and gas is about 22%.
One year on from a stunning election victory, the Pakatan Harapan government faces hostile global economic conditions, a resurgent Malay-dominated opposition and disenchanted supporters.
SINGAPORE (May 6): On April 11, UBS economist Kelvin Tay gave an interview on TV that landed him in hot soup. During the interview, Tay blamed “political paralysis” in Malaysia for landing the country in an economic bind that includes a “current account deficit” of higher than 3.4%. Tay also said that abolishing the Goods and Services Tax (GST) — which was to have brought in RM36 billion ($11.8 billion) in revenue for the government in 2019 — was “just a bad move, because it means the country is going to be very, very reliant on oil”.
