Malaysia's government led by Prime Minister Mahathir Mohamad on Friday proposed a smaller national budget focused on boosting domestic economic activity.

A total of 297.02 billion ringgit (70.96 billion U.S. dollars) will be allocated for the 2020 budget, down from 314.55 billion ringgit (75.49 billion U.S. dollars) allocation for this year.

In unveiling the budget, Finance Minister Lim Guan Eng said 241 billion ringgit of the budget would go towards operating expenditure while 56 billion ringgit would be spent on development.

Lim said the 2020 budget is growth-centric, with measures to optimize the impact on economic growth, job creation and structural change, without compromising the government's commitment to restore Malaysia's fiscal health in the medium term.

He said Malaysia's economy will remain resilient as a result of budgetary measures, adding that the economy is expected to grow by 4.7 percent this year and improve to 4.8 percent in 2020.

"In the event of continued worse-than-expected external environment, the government is ready to step in with contingency measures to provide further support or stimulus to growth," he added.

Inflation is expected to remain well anchored at 2.0 percent in 2020 and the government expects to collect 244.5 billion ringgit in revenue next year.

Also allocated were funds for farmers, fishermen, the disabled and other segments of the population in need of welfare, including cash assistance and increased facilities.

Lim also outlined various measures and monetary incentives to encourage businesses and companies operating in Malaysia to reduce their dependence on foreign workers and hire locals.

Lim added that the government would continue to seek foreign direct investment, particularly from China, which will be facilitated through a special channel to be created under the government's investment promotion agency.

Source: China ASEAN Business Council