GEORGE TOWN, Nov 26 — The Penang state government today tabled Budget 2022 which projected a higher deficit of RM449.80 million compared with RM403.80 million estimated for 2021.
Chief Minister Chow Kon Yeow said the state government was prudent in setting revenue expectations for next year taking into account the effects of the COVID-19 pandemic which has yet to subside.
“With an expected state revenue of RM485.42 million and expenditure of RM935.22 million, the state’s budget for next year is projected to record a deficit of RM449.80 million.
“The estimated deficit will be financed by the state consolidated fund, which has a balance of RM887.78 million at the end of 2020,” he said when tabling Budget 2022 themed “Accelerating Penang2030” at the State Legislative Assembly sitting here.
“The allocation for operating expenditure for 2022 increased by RM25.40 million or a rise of 2.79 per cent compared with Budget 2021 due to the increase in yearly emoluments, providing grants to state government-owned subsidiaries, post-COVID-19 pandemic recovery plans, and others,” he said.
Chow said the budget took into consideration factors such as ensuring the continuation of state development projects to revive the state’s economic recovery, continuing existing state welfare programmes, and also to make sure all state departments function optimally and efficiently.
Despite a high deficit projection, he said the state government was optimistic that revenue collection will increase in line with the economic recovery measures being taken by the state and federal governments.
He said the Penang economy was expected to recover gradually in 2022, with tourism and hospitality activities expected to recover at a modest growth rate supported by domestic tourism, and balanced by stable growth in the manufacturing sector especially in electrical and electronics (E&E) products.
The state government has allocated RM50 million in Budget 2022 to revive the state’s tourism industry, which was the second-largest contributor to the Penang economy before the pandemic.
Chow said the state government would also create a conducive business environment and continue with its infrastructure development by emphasising on ease of doing business in Penang, maintaining competitive costs, as well as infrastructure development and maintenance to support investor needs in the Industrial Revolution 4.0 era.
