Deputy finance minister says Malaysia’s low 2.5pc inflation rate thanks to subsidies, price controls
PUTRAJAYA, Aug 23 — Malaysia has been able to keep its inflation rate at 2.5 per cent for the first half of this year due to the government’s price control measures and targeted subsidies, Deputy Finance Minister Datuk Mohd Shahar Abdullah said today.
He added that the national inflation rate is also lower compared to its regional neighbours like Singapore and Thailand and even more advanced countries like the US and the UK.
“The country’s inflation level for the first six months of 2022 recorded a rate of 2.5 percent.
“This inflation rate is much lower than other countries, especially among developed countries such as the US and UK which reached 9 per cent, while regionally, such as Thailand, the Philippines and Singapore, it reached over 6 per cent,” he said at the Budget 2023 Consultation event here.
He added that the government’s move to continue and improve subsidies, spending on aid and subsidies is estimated to increase to RM77.7 billion for next year’s Budget, compared to the RM31 billion for Budget 2022.
Shahar stressed that without these subsidies provided for basic goods, the inflation rate would have hit an estimated 11.4 per cent.
He said that moving forward, the government remains committed to ensuring the wellbeing of the rakyat, especially households that would be severely impacted by the rise of global commodity and food prices.
He added that Putrajaya would also consider implementing more targeted subsidy mechanisms to ensure those who are really in financial trouble can be assisted.
“This fiscal reform initiative aims to strengthen the government’s financial position, as well as create fiscal space and flexibility to implement counter-cyclical measures to continue supporting the economy and strengthen the country’s resilience to face future challenges,” he said.