KUALA LUMPUR: Malaysia aims to borrow its way out of an economic slump brought on by the coronavirus pandemic, and the finance minister told Reuters it will nearly double its fiscal deficit this year while keeping open the option of raising the public debt ceiling.

Southeast Asia`s third-biggest economy has announced incentives worth 295 billion ringgit ($69bn) to soften the impact of the coronavirus pandemic, with the government vowing to directly inject 45bn ringgit of that into the economy, mostly raised throughdomestic borrowings.

Finance Minister Tengku Zafrul Aziz told Reuters the fiscal deficit would rise to around 6 per cent of annual economic output this year because of the stimulus, and that a direct fiscal injection of 10bn ringgit announced on Friday would be raised through domestic borrowing.

`There is only so much monetary policy can do,` Tengl(u Zafrul said in an interview in his office. `So you need fiscal policy to come into play, as long as you have the discipline and the commitment in the longer term to goback to where you should be in terms of the deficit.` Tengku Zafrul, who was chief executive of lender CIMB Group Holdings Bhd before joining the three-month-old government, said the goal was to narrow the fiscal deficit back down to less than 4pc of gross domestic product (GDP) over the next three years or so. It was 3.2pc last year.

`How bad was it during the (global financial crisis)? It was 6.7pc. So we have room if we want to borrow,` he said, referring to the country`s peak annual deficit in 2009.-Reuters