Author: Danial Azhar and Latiff
Kauala Lumpur (Reuters) -Malaysie Prime Minister Anwar Ibrahim announced new measures on Wednesday to deal with increasing public concern about rising cost of living, including a cash leaflet for all adult citizens and a promise to reduce fuel prices.
His statement on television broadcasts came before the planned protest, which took place on Saturday in the capital of Malaysia Kuala Lumpur, whose aim was to force Anwara to step over the escalating prices and could not meet the promised reforms.
This year, AnWar administration has taken a number of measures to increase revenue and productivity, including minimal wage increases, increased electricity tariffs to heavy energy users and extended sales and services taxes.
Anwar said that the moves were mainly focused on large businesses and rich, but critics expressed concern that higher costs would eventually be handed over to consumers, including earnings with lower and medium incomes.
On Wednesday, Anwar said that all Malays over 18 will receive 100 Ringgit ($ 23.67) in a one -time cash leaflet that will be paid from August 31.
The government will spend a total of 15 billion ringgites ($ 3.55 billion) in cash aid in 2025, out of the 13 billion Ringgit originally assigned for a year, he said.
The police said they expected to participate in the Saturday protest between 10,000 and 15,000 people, organized by opposition parties.
“I acknowledge the complaints and I acknowledge that the cost of living remains a challenge to be solved, even if we have previously announced various measures,” Anwar said, adding that on Thursday another initiative to help those who are in poverty.
Anwar said that the government will also announce the details of the long -awaited plan to modify the area subsidies for the widely used RON95 transport fuel by the end of September.
Once the subsidies are introduced, the Malaysians will see fuel prices to drop the pump to 1.99 Ringgit per liter, compared to the current price of 2.05 ringgit, said Anwar.
However, foreign nationals will have to pay unlimited market prices for fuel, he said. Anwar did not provide details of how the measure would be enforced.
Analysts argue that changes in the system of rationalization of fuel subsidy – originally set for half of 2025 and aimed at removing subsidies for the rich – could affect the plans of fiscal consolidation of Malaysia.
The economist of investment bank Kenanga Muhammad Saifuddin Sapuan said that measures for cash registers and subsidies were necessary to strengthen domestic demand, in the middle of external headwinds resulting from ongoing global uncertainty.
“However, it comes to the price, especially how the government finances it, and is likely to exert pressure on its fiscal goal,” he said.
Kathleen Chen from the Fitch Ratings team ‘Sovereigns Team said that further delay or insufficient progress in the rationalization of the subsidy could endanger the government’s goal to reduce its deficit to 3% by 2028.
Fitch expects the Malaysian government’s debt to remain high, around 76.5% of GDP in 2025, with only a gradual decline in the medium term, she said.
(Report Danial Azhar and Latif’s Edit;
(Tagstotranslate) living costs
