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KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim has refuted claims that the monetary, fiscal and budget policies have not been successful in achieving the government’s promise of debt and fiscal deficit reduction. He stressed that the government is committed to lowering the national debt, which is currently being done. Anwar said there have been some hue and cry in the past few weeks suggesting that the government was not telling the truth and has reneged on its promise. “We have been attacked on social media, but the information given is false,” he said in a video posted on X, adding that some of the claims are unfounded and irresponsible political swipes. Previously, Anwar announced that the government targets to reduce annual borrowing to RM86 billion this year from RM93 billion in 2023 and RM100 billion in 2022. He noted that the present government had inherited debts topping RM1 trillion and the figure even reached RM1.5 trillion. Anwar explained that at the same time, the government could not simply eliminate all debts as this would affect projects that are meant to help the people as well as obligations to repay old debts, among others. “The debt level is high and now stands at 64% of gross domestic product (GDP). Our target is to reduce it in stages to at least 60%,” he said. According to Anwar, the national fiscal deficit has been lowered to 5% of GDP in 2023 from 5.6% in 2022 and this year it is projected to be reduced to 4.3% “I present these figures, which are being defended as being truthful. The Finance Ministry, along with the Department of Statistics Malaysia, release such data from time to time,” he added. — BERNAMA

Malaysia has been in focus when it comes to data centre investments, with areas like Johor Bahru, Cyberjaya and Kulim being the busiest. Earlier in June, an international news portal reported that Malaysia is emerging as a data centre powerhouse in Southeast Asia and the continent more broadly as demand surges for cloud computing and artificial intelligence. Over the past few years, the country has attracted billions of dollars in data centre investments, including from tech giants like Google, Nvidia and Microsoft. According to DC Byte Managing Director of APAC James Murphy, Johor alone might overtake Singapore by becoming the largest market in Southeast Asia within a couple of years. In light of this, the Malaysian government plans to announce guidelines for data centre power usage effectiveness (PUE) and water usage effectiveness (WUE) by the third quarter of the year to boost investments. On this, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the guidelines would ensure data centres built in Malaysia meet the minimum sustainability requirements to achieve net-zero emissions by 2050. “As data centres consume a lot of power and water, we want to ensure that the data centres built here (in Malaysia) meet the minimum requirements set by global institutions. “SIRIM and the Department of Standards Malaysia are in the midst of finalising (the guidelines), and we will announce them by the third quarter of this year,” he said after the groundbreaking ceremony for Vantage Data Centres’ second campus (KUL2) in August. Tengku Zafrul said the Ministry of Investment, Trade and Industry Ministry (MITI) will work closely with the Digital Ministry and Malaysia Digital Economy Corporation (MDEC) to incorporate the improvements into the data centre ecosystem. Meanwhile, Digital Minister Gobind Singh Deo said the two main challenges for data centre investments are power and water, hence the guidelines being developed will ensure that the country has a sufficient and sustainable supply of both resources for the next five to ten years to attract more investments. Gobind also said the Digital Ministry and MITI are working together to address concerns about sufficient water and electricity supply due to significant demand from industry players. “We need to push ahead to ensure we can develop Malaysia as the hub for data centres in this region, particularly as we move towards the country’s ASEAN 2025 chairmanship. “We want to project Malaysia as a country with clear policies that are attractive not just to data centres but all investments in that ecosystem as well,” he said. Vantage’s KUL2 is located adjacent to its existing campus in Cyberjaya. It will have 10 facilities across 256,000 square metres. The US$3 billion KUL2 data centre campus will deliver 256MW of information technology (IT) capacity to meet the growing demand for hyperscale data centre services. Cyberjaya Increases Attractiveness for Hyperscale Data Centres Cyberjaya, as the preferred tech (technology) investment location, remains attractive to hyperscale data centres, with a few more operators coming on board soon, said Cyberview Sdn Bhd Chief Executive Officer, Kamarul Ariffin Abdul Samad. He said that to date, the city is home to 15 data centres, which consist of commercial and captive data centres, including hyperscalers, among the operators of which are Equinix, Bridge Data Centre, EdgeConnex, Microsoft and NTT. “We still have good enquiries from more data centres and it shows that Cyberjaya is the preferred location for data centre operators. I cannot reveal it now because it is still being negotiated. We will make the announcement at the right time,” he said. Kamarul Ariffin said that with growing interconnectedness, automation, and massive data processing, data centres, which are the very backbone of the digital economy, first and foremost contribute directly to enhancing the overall digital infrastructure. He said in ensuring that investors are well-supported, Cyberview puts in place the required elements which include enhancing and optimising its infrastructure. “Some data centres that are going to open in Cyberjaya are already artificial intelligence (AI)-ready. Some of the centres being constructed here are building Al data centres so it can convert from hyperscale to Al when the need arises,” he said.

KUALA LUMPUR: Malaysia’s 2023 nominal gross domestic product (GDP) amounted to RM1.8 trillion, with growth moderated to 1.6% from the double-digit 15.9% in 2022. In a statement, Department of Statistics Malaysia (DOSM) Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said that despite the moderated performance, the economy remained resilient, particularly through private final consumption expenditure, which increased 6.7%. “The growth was propelled by ongoing enhancement in employment and wage through the implementation of a new minimum wage of RM1,500 starting May 2023,” he said. The income statistics from economic production include 3 key components, namely compensation of employees (CE), gross operating surplus (GOS) and taxes less subsidies on production and imports (net taxes). Given the improvements in the labour market, Mohd Uzir said CE recorded a steady growth of 4.2% while GOS declined by 1.8%, while the performance of the income distribution showed a shift towards a better share of CE at 33.1% compared to 32.3% in 2022. “Nevertheless, GOS still contributed substantially to the GDP at 64.8%, although 2.3% lower than the previous year. The remaining component was net taxes, which accounted for 2.1%,” he said. Looking at detailed sectoral performance, he said the increase in the CE component, encompassing the remuneration received by employees for their labour was driven by the services, manufacturing and construction sectors. “CE in the Services sector grew 4.3% supported by growth in all sub-sectors, particularly wholesale and retail trade, food and beverages and accommodation. “As for the manufacturing sector, CE registered 3.3% growth led by the moderation in electrical, electronic and optical products,” he said. Mohd Uzir added that the decline in GOS was primarily influenced by the sharp downturn in the mining and quarrying (-12.1%), agriculture (13.2%) and manufacturing (-5.6%) sectors. “The fall of commodity prices in 2023 has lowered profitability across these sectors, leading to a marked decrease in overall GOS. Nevertheless, the contraction was partially alleviated by the growth in the services and construction sectors at 5.3% and 1.3%, respectively,” he said. Net taxes showed a remarkable growth of 242% or RM37.7% in 2023, attributed to the higher taxation revenue as compared to a decrease in subsidies. In the context of international comparison, Mohd Uzir said the composition of the CE in the Southeast Asia region is notably lower, accounting for less than 40% of GDP while GOS makes up a larger share. “As opposed to advanced economies such as United States, Germany and Canada, CE constitutes a greater share than GOS at 53.1%, 52.4% and 51.1%, respectively. “Net taxes formed a smaller share of GDP in the selected countries, with Malaysia recording the lowest contribution of 2.1%, reflecting the differences of fiscal policy among countries,” he said. — BERNAMA

KUALA LUMPUR: A total 3.4 million of the 13.1 million Employees Provident Fund (EPF) members under the age of 55 have made withdrawals from the Flexible Account amounting to RM8.9 billion as of 19 July 2024. Finance Minister II Datuk Seri Amir Hamzah Azizan said that for the same period, a total of 3.8 million or 29.3% of EPF members chose to have the initial amount in the Flexible Account (Account 3) with a transfer of RM12.6 billion, while RM5.6 billion was transferred to the Retirement Account (Account 1). He said the transfer to the Retirement Account increased members’ savings, with the addition of 43,000 new members having reached the basic savings level. “Withdrawals from the Flexible Account do not significantly impact the EPF as the expected amount of withdrawals by members is within the EPF’s cash and money market allocation. “Under the current Strategic Asset Allocation, the EPF has allocated investments in cash and money market instruments between 2% and 6% of the total investment assets of the EPF,” he said. Regarding the implications for the national economy, Amir Hamzah said the initial estimate of the Flexible Account withdrawals in the first year is around RM15 billion or about 0.8% of Malaysia’s nominal gross domestic product (GDP) for 2023. “Nevertheless, the actual impact of the introduction of Flexible Account on the country’s GDP growth will depend on several factors, including the members’ spending tendencies,” he said. The minister also stressed that the restructuring of EPF accounts is aimed at improving the security of retirement income and giving members access to the Flexible Account at any time and for any purpose, especially for emergencies. “However, EPF members are advised to use withdrawals for emergencies and urgent needs only,” he added.

PUTRAJAYA: Prime Minister Datuk Seri Anwar Ibrahim wants Budget 2025, which will presented on 18 October in the Dewan Rakyat to focus on addressing and reducing the cost of living. Anwar, who also serves as the Minister of Finance (MoF), emphasised that the cost of living remains a pressing concern for the public, and it is the government’s duty to alleviate this burden. “Even though I can say that our sugar, oil, flour and cooking oil are among the cheapest, Malaysians still feel the strain. “Therefore, this Budget will not only address the issues we have been discussing but will also tackle the problems posed by cartels, monopolies and the factors driving up prices. We must address all these issues,” he said during his speech at the MoF monthly assembly for August 2024. Finance Minister Il Datuk Seri Amir Hamzah Azizan, Deputy Finance Minister Lim Hui Ying and Treasury Secretary-General Datuk Johan Mahmood Merican were also in attendance. Anwar highlighted the importance of cross-ministerial efforts led by the MoF to devise strategies and methods to reduce the cost of living. He pointed out that the rising costs are exacerbated by issues such as leakage, corruption, smuggling and cartels. “Your experience within the MoF, whether in enforcement or policy planning, is crucial. We must consider all possible methods and strategies to lower costs. “These cost increases are driven, among other factors, by leakages, corruption, smuggling and excessive profits from cartels,” he added. — BERNAMA