ࣧࢥ࢛࣮ࢸࣔ࣎
                         Fiscal 
                         Policy 
                         Overview
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                                                                           ࣠ࣔࣇࢸ࢛अࣳ࣎ࢡࢥࣣ࣠ࢸ࣎ࣧࢥ࢛ࣔ࣎ࣔ࣍ࢸ࢛
                                                                           ࣣࢥ࢛ࣔࣾࢥࣣअ
                                                                           Information Box - National Trust Fund
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                                                                           ࢯࣣࢍ࣍ࢥࣣࣿࣔࣅ
                                                                           Feature Article - Fiscal Responsibility Act        
                                                                           Framework
                                                                     ࢛࢛ࣔ࣎ࣇࣳࣧࢸࣔ࣎
                                                                                  ࣧࢥ࢛࣮ࢸࣔ࣎ࢯࢸ࢛ࣧࢍࣇ࣠ࣔࣇࢸ࢛अࣔࣾࢥࣣࣾࢸࢥࣿ
                                                            ࣧࢥ࢛࣮ࢸࣔ࣎
                                        Fiscal Policy Overview
                  Overview                                           Recognising that vaccination is the key factor 
                                                                     in addressing the pandemic, the Government 
                  Against the backdrop of the prolonged              launched the National COVID-19 Immunisation 
                  COVID-19 pandemic, fiscal policy assumes a         Programme (PICK) on 24 February 2021. The 
                  primary role in economic recovery. The third       rollout of PICK signifies the Government 
                  wave of the COVID-19 outbreak poses a major        commitment to ensure at least 80% of the 
                  challenge to the Government’s fiscal burden,       adult population receives full vaccination by 
                  particularly in balancing its impact on the        the end of October 2021. Subsequently, in  
                  future generation. With an exponential rise in     June 2021, the Government unveiled the 
                  positive cases, a national state of emergency      National Recovery Plan (NRP), a roadmap 
                  was declared effective from 11 January until       to exit from the pandemic and accelerate 
                  1 August 2021 to enhance enforcement,              economic recovery. The NRP, tabled in 
                  improve containment measures and tighten           Parliament in July 2021, provides clear 
                  border control. In view of the extraordinary       guidance for reopening the economy and 
                  situation, the Government has proactively          social activities through a four-transitional 
                  extended its policy flexibility and pragmatism     phase strategy based on data analytics. As 
                  to protect the people and businesses as well       a policy continuation, the NRP consolidates 
                  as supporting the economy.                         all containment and economic assistance 
                                                                     measures into a comprehensive and whole-
                  The Government continues to provide                of-nation approach in uniting the country to 
                  substantial fiscal support in 2021 in the          combat the pandemic. 
                  form of additional assistance and stimulus 
                  packages to cushion the adverse impact of 
                  the pandemic and containment measures.             Expansionary Fiscal 
                  A series of four packages totalling RM225          Policy Underpins 
                  billion has been introduced this year, namely 
                  the Perlindungan Ekonomi dan Rakyat Malaysia       Economic Recovery
                  (PERMAI), Strategic Programme to Empower 
                  the People and Economy (PEMERKASA),                The Federal Government’s fiscal stance 
                  Strategic Programme to Empower the People          continue to prioritise steering the nation 
                  and Economy Plus (PEMERKASA+) and National         out of the pandemic crisis. The provision 
                  People’s Well-Being and Economic Recovery          of significant fiscal support is expected 
                  Package (PEMULIH). Additional fiscal injection     to contain the outbreak, sustain domestic 
                  under these packages, estimated at RM25            economic activity, generate investments, 
                  billion, aims to boost healthcare spending,        stimulate consumer spending and create job 
                  ensure business continuity and ease the            opportunities. The rollout of more targeted 
                  burden of the rakyat. Overall, the Government      recovery measures has positively impacted the 
                  has announced eight assistance and stimulus        economy, as reflected by the strong economic 
                  packages totalling RM530 billion since the         growth of 7.1% in the first half of this year. 
                  pandemic last year with fiscal support of RM80     The Government is confident that with the 
                  billion provided under the COVID-19 Fund.          smooth political transition as well as policy 
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                ࣧࢥ࢛࣮ࢸࣔ࣎ࢯࢸ࢛ࣧࢍࣇ࣠ࣔࣇࢸ࢛अࣔࣾࢥࣣࣾࢸࢥࣿ
                continuation and clarity, the economy will            2021 compared to 30,000 in the early stages 
                recover and record positive growth in 2021.           of implementation due to a higher supply of 
                                                                      vaccines. As at end-August, the Government 
                As the global economic recovery continues             has secured more than 87 million vaccine 
                to be uneven and volatile, fiscal operations          doses worth around RM4.3 billion to ensure 
                remain proactive and agile to respond to              a smooth PICK implementation. Malaysia 
                dynamic economic environments and policy              achieved its target of inoculating 80% of the 
                priorities. Efforts to enhance spending               adult population in September 2021.
                effectiveness and efficiency will be supported 
                by prudent expenditure measures as well               In addition, the socioeconomic and 
                as optimising the operating environment in            development agenda remains the top priority 
                adjusting to the new normal. Furthermore,             for the Government in the medium term, as 
                strategies to improve revenue buoyancy will be        stipulated in the Twelfth Malaysia Plan,  
                implemented more orderly without disrupting           2021 – 2025 (12MP). Consequently, fiscal 
                the recovery momentum.                                resources will also be directed to implement 
                                                                      programmes and projects under the 12MP, 
                To drive health and economic recovery, the            which will serve as a catalyst in charting 
                Government has mobilised various fiscal               the path for a prosperous, inclusive and 
                tools to balance the spending needs and               sustainable nation. In this extraordinary 
                fiscal sustainability. This includes partial          situation, the Government has tabled a 
                utilisation of the National Trust Fund (NTF) to       motion in Parliament to increase its statutory 
                ensure sufficient funding and accelerate the          debt limit, taking into account the financing 
                implementation of vaccination programmes              needs of the recovery measures and the 
                under PICK. As a result, Malaysia’s vaccination       implementation of 12MP. In ensuring 
                rate is among the fastest globally, thus              medium-term fiscal sustainability, the fiscal 
                allowing the Government to reopen more                consolidation trajectory is envisaged to be 
                economic sectors to boost the economy. The            more gradual than initially projected. This is to 
                number of daily vaccinations has recorded a           provide sufficient fiscal support for the nation’s 
                sharp increase to around 500,000 doses in July        economic recovery and development agenda.
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                A sovereign wealth fund (SWF) is a fund established by a government to manage and grow 
                the country’s wealth. The source of the wealth may be in various forms, such as revenue from 
                natural resources, fiscal or budgetary surpluses and even direct transfers from the government to 
                achieve specific economic and development purposes. SWF usually serves as a contingent asset to 
                preserve the wealth from the country’s non-renewable resources and may be utilised to cushion 
                any unexpected shocks such as an economic downturn or impact from a natural disaster. There are 
                various types of SWF established around the world based on their source of funds and purpose, 
                which is summarised as follows:
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