Targeted fuel subsidy won’t affect private consumption much, says think-tank

Sheridan Mahavera

If the PSP is not implemented, the government will have to spend RM4.8 billion this year to cap the RON95 price. If the PSP is implemented, it will only cost the government RM784.8 million for all of 2020. – The Malaysian Insight file pic, January 21, 2020.

THE expected rise in petrol prices after the government’s blanket subsidies are removed is unlikely to dent private consumption, a key driver of economic growth this year, said a think-tank.

In the past, domestic private consumption continued to grow even as inflation went up, such as when the goods and services tax (GST) was implemented, said the Socio-Economic Research Centre (SERC).

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