Malaysia plans record $18 billion subsidy spend in inflation fight

Malaysia plans record $18 billion subsidy spend in inflation fight thumbnail

Malaysia plans record $18 billion subsidy spend in inflation fight
© Reuters. A Malaysia Ringgit note is seen in this illustration photo June 1, 2017. REUTERS/Thomas White/Illustration/Files

KUALA LUMPUR (Reuters) – Malaysia is expected to spend 77.3 billion ringgit ($17.6 billion) in subsidies and cash aid this year, the largest amount in history, to help temper the effects of rising prices, its finance minister said on Saturday.

Prices of goods have jumped in Malaysia in recent months due to supply chain disruptions, labour shortages and the impact of war in Ukraine. Food inflation rose 5.2% from a year earlier in May, the highest since November 2011, government data showed this week.

Malaysia is projected to spend 51 billion ringgit on consumer subsidies including for fuel, electricity, and food, assuming that commodity market prices remain at current levels, Finance Minister Tengku Zafrul Aziz said in a statement.

The government will also distribute 11.7 billion ringgit in cash aid, and 14.6 billion ringgit in other subsidies, he said.

Malaysia said on Wednesday it would disburse nearly $400 million this month to help households cope with rising food and living costs.

Earlier this month, it said an increase in government revenue from rising commodity prices was insufficient to offset an expected spike in subsidy spending this year.

($1 = 4.4000 ringgit)

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