The budget plans for 2011 announced in Malaysia late last week aim to ensure that the economic upswing continues and showed once again that the top priority was the implementation of new measures to improve the operating environment for business and lift private sector investment. Slowing the pace of fiscal consolidation should not cause too many problems and suggests that Prime Minister Razak wants to hold an early general election in 2011. We still expect that the central bank (BNM) will lift policy interest rates further and that the ringgit will continue to appreciate.