Malaysia trimmed its fiscal deficit to 3.9 percent of gross domestic product last year, after cutting government spending and state subsidies to avert a credit-rating downgrade.
Prime Minister Najib Razak narrowed the shortfall from 4.5 percent of GDP in 2012, beating the government’s 4 percent deficit target for last year, according to data released on the central bank’s website. Malaysia wants to further reduce the budget gap to 3.5 percent this year and achieve a balanced budget by the end of this decade.
Fitch Ratings lowered its outlook on Malaysia to negative from stable in July, citing public finances as the country’s “key rating weakness.” Najib cut subsidies on essential items including fuel and sugar, trimmed ministers’ entertainment budgets and froze proposals to renovate government offices.
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