KUALA LUMPUR, Aug 27 — Prime Minister Datuk Seri Anwar Ibrahim said Malaysia’s second-quarter economic growth of 6 per cent is an outstanding achievement that strengthens investors’ confidence in the country, but said it should not be misconstrued as a direct indication of higher government revenue.
Anwar, who is also finance minister, said the assumption that stronger economic growth would automatically enable the government to generate higher revenue and increase spending is economically inaccurate.
“Many people ask: if we have recorded 6 per cent growth in gross domestic product (GDP), shouldn’t that mean higher revenue and allow us to spend more? But that is not how it works. That would be poor economics.
“The higher growth in areas such as artificial intelligence (AI), data centres and digital technology does not directly translate into government revenue. Rather, it contributes in terms of development, employment opportunities, enhanced capabilities and technology,” he said in his speech at the National Innovation and Commercialisation Expo (NICE) at the Kuala Lumpur Convention Centre here today.
The prime minister noted that investments in these sectors differ from those in sectors such as manufacturing and agriculture which generate more direct returns to the country, adding that investments in digital and technology sectors generate indirect benefits that would take some time to be translated into government revenue.
