KUALA LUMPUR: Minister in Prime Minister's Department Datuk Seri Wahid Omar says the government will review Budget 2016 if oil prices continue to stay low.
The government had planned for the Budget based on the assumption that Brent crude would average at US$48 per barrel for next year but at midday on Thursday, it was trading around US$37 per barrel.
"The government will need to optimise the country's expansion plan if oil prices continue to stay low," he said. That includes reviewing some of the projects it has announced.
Wahid also said the government would continue to support the growth of businesses and companies to ensure any potential impact on the economy would be cushioned should oil prices stay at the current low level.
"We saw that through 2008 and 2009 but most companies remained operational and people continue to have jobs," he added.
He also said the Malaysia's fundamentals remain strong as the country have diversified resources, export markets and income stream from other industries besides oil and gas.
But he was hopeful that oil prices will recover next year and declined to comment on when that could happen. Oil prices tumbled from US$100 in mid-2014.
On the US Federal Reserve's rate hike, he said it came in within expectations.
"Based on the tone of the Fed, it should be gradual and will be more towards normalisation," he added.
On whether Malaysia would adjust its overnight policy rate (OPR) following the US rate hike, he was non-committal to a figure but noted the OPR was accommodative for investments at 3.25 per cent.
He expected the ringgit to be at 4.20 against the US dollar next year.