Abstract
The main objective of this paper is discovers the nature of fiscal sustainability in Malaysia. First of all, I need to examine whether Malaysian fiscal policy and stance accomplish to support the fiscal sustainability by analyzing the accuracy of the government plan and policy in the past period. Then, I shall find the tendency for the government to run budget deficit if the debt for the past year become less and observe the level of relationship between the new issuance of government securities to finance the government debt when the government run budget deficit using OLS method. After that, I will determine the causal direction between government expenditure and government revenue via Granger Causality Test by applying Seemingly Unrelated Regression Model. Furthermore, to perceive vulnerability of the debt, I analyze the exposure that might influence Malaysia Government Debt. This paper also will verify how does liberalization of taxes that been applied in Malaysia gradually effect the government revenue and discuss the suitability of municipality fees as alternative source of revenue in future.
Published Version
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