KUALA LUMPUR (Oct 8): Malaysia is "definitely not on an austerity mode", Finance Minister Lim Guan Eng said, as the Ministry of Finance (MoF) prepares for the upcoming Budget 2019 which will be tabled on Nov 2.

"What we are calling for is not austerity, but smarter spending," said Guan Eng in his luncheon address at the Khazanah Megatrends Forum 2018 themed "On Balance: Recalibrating Markets, Firms, Society and People" here today.

He noted that the government will not be solely pursuing fiscal consolidation at all costs. "Fiscal sustainability is but one of our aims to drive Malaysia’s long-term development," he added.

Guan Eng also said the government will be supportive of a private sector-led economic growth.

"If you want to see Malaysia achieve a developed nation status or to ensure that we are not bypassed by other countries... and we know which of these countries are right behind our backs, only a private sector-led growth [will] allow Malaysia to become a high-income economy," he said.

"I also believe that if we could collaborate with the private sector, the people and also the professionals here, we can make it," he said, adding that the government is hoping to recalibrate the respective roles of all the stakeholders in Malaysia.

The MoF is also expecting Malaysia's current account to remain in surplus this year and not suffer from a twin deficit.

With the reintroduction of the sales and service tax (SST) in September, import growth will moderate and improve the trade balance in the short term, said Guan Eng.

Last year, Malaysia recorded a current account surplus of 3% to gross domestic product (GDP) and in the first half of 2018, the balance stood at 2.7% to GDP or RM18.9 billion.

"There have been some concerns about the weak second-quarter 2018 current account surplus of only RM3.9 billion and the low August 2018 trade balance of RM1.6 billion. But these low surpluses in large part were caused by the tax holiday period after we abolished the goods and services tax, which had in turn encouraged imports," said the minister.