THE government’s continuous intervention and commitment to providing subsidies makes Malaysia’s inflation the lowest in Southeast Asia, and probably even in the whole world, Prime Minister Ismail Sabri Yaakob told the Dewan Rakyat today.

The Bera MP said that if the government had withdrawn subsidies, inflation would be somewhere between 8 and 11%.

“The effect of our subsidies caused our inflation to remain low.

“Our inflation (currently) remains at 2.8% and if subsidies are not provided, then the inflation rate would have risen to somewhere between 8 and 11%,” the prime minister said in reply to ministers’ questions about cost of living issues during Question Time today.

Ismail was responding in particular to opposition leader Anwar Ibrahim (Port Dickson-PH), who asked about the measures taken by the government to address the rising living costs and prices of goods. 

Comparing Malaysia’s inflation with the rate in other countries, Ismail said that Thailand’s inflation rate was at 7.7%, Singapore (5.6%), Indonesia (4.4%), United Kingdom (9.1%), United States (9.1%), European Union (8.6%). 

He said Putrajaya had proven its commitment to helping Malaysians by increasing the amount of subsidies, to RM77 billion this year, compared to the original allocation of RM31 billion in the national budget.

Subsidies are given for cooking oil, wheat, liquefied petroleum gas (LPG), diesel, RON95 petrol and electricity tariffs. 

On the higher ceiling price for chicken and eggs, Ismail said the government was still continuing subsidies – totalling RM1.1 billion – for these items which was helping to stabilise prices and supply.

“The subsidy for each egg is 3 sen and for chicken the subsidy has been reduced by 20 sen.

“Although we set a ceiling price for chicken at RM9.40 (per kg), the average chicken price nationwide has dropped RM9.22 and Pahang has recorded the lowest price of RM8.95 (per kg),” he said. 

On cooking oil, Ismail said people should not compare oil sold in 5kg bottles but instead look at the price difference between subsidised cooking oil sold in 1kg polybags and 1kg bottles. 

“The 1kg cooking oil in polybags is sold at RM2.50 each, while the 1kg bottled cooking oil is sold at RM9. There is a huge difference here.

“So, if the government does not give subsidies, then even the cooking oil in polybags will be priced at RM9,” he said. 

The subsidised cooking oil sold in 1kg polybags is to help those in the B40 group, and subsidies for this is worth RM4 billion, he added. – July 18, 2022.