PUTRAJAYA is willing to bear RM77.3 billion in projected subsidies this year to stabilise the prices of goods and avoid high inflation rates of up to 11.4%, said Economy Minister Mustapa Mohamed.
He said the government could have removed the subsidies and strengthened its finances, but chose not to for the welfare and well-being of the people.
Of the RM77.3 billion, RM51 billion are for cooking oil, chicken, eggs, electricity, fuel and water subsidies, he added.
“Without these subsidies (RM51 billion), the inflation rate of 2.8% in May could have been 11.4%. This shows that the subsidies stabilise prices in the country.”
Finance Minister Tengku Zafrul Abdul Aziz said the RM77.3 billion in projected subsidies included diesel, petrol and liquified petroleum gas (RM37.3 billion), cooking oil (RM4 billion), government aid (RM11.7 billion) and others (RM14.6 billion).
Mustapa said: “The government’s financial position would be better without the subsidies, but it took into consideration the needs of the people.”
Hence, he added, the government spends on subsidies for the well-being of the people and to help lessen their burden.
But there is a possibility that the biggest sum of subsidy ever given will have an impact on the fiscal deficit of the country, and that the government needs to look into cost-saving measures, he added.
On whether the government will postpone the implementation of mega projects to save costs, he said though there is no final decision on the matter yet, there is an emphasis on saving expenditure following the global economic crisis.
“The government has yet to decide on whether to postpone the implementation of mega projects in view of the situation being dynamic and changing from time to time,” he said, in reference to the high oil market price and uncertain Ukraine-Russia crisis. – Bernama, June 27, 2022.
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