KUALA LUMPUR, July 7 (Bernama) — Malaysia needs to continue to manage the inflation rate well, even though inflation in this country is still among the lowest in ASEAN, to ensure that the people are able to cope with the rising cost of living, which is also faced around the world at this time.
Independent economist, Dr Baayah Baba, is of the view that if Malaysia wants to maintain a low and controlled inflation rate, the government must continue to provide subsidies for basic necessities.
“We are aware that the government subsidies have now reached more than RM77 billion, but it must continue to provide subsidies for certain goods to ensure that the people are not too affected by the current inflation situation.
“It is most important for the government to stabilise the price of goods and use enforcement to monitor, so that no one takes advantage by raising prices arbitrarily,” she told Bernama.
Prime Minister, Datuk Seri Ismail Sabri, during a luncheon with Malaysians living or studying in Turkiye on Tuesday, said that the government continued to provide subsidies for items such as chicken, cooking oil, petrol and diesel.
The government also maintained electricity and water tariffs, with a subsidy of RM5.8 billion, to safeguard the interests of Malaysian families despite the sharp increase in cost of fuel and other energy sources.
In the meantime, Baayah believes that the proposal to return the Goods and Services Tax (GST) should be expedited to increase the country’s income while addressing rising inflation and the cost of living.
She said that the planned tax collection through GST would enable the government to recoup revenue and channel it back to people in need, especially the B40 group who are most vulnerable to the current situation.
For the record, a total of 8.6 million recipients of Bantuan Keluarga Malaysia (BKM) received payments through an allocation of RM1.74 billion in stages from June 27, and to date, eight million people, or 93 per cent, have received payments.
On the increase in the Overnight Policy Rate (OPR) by Bank Negara Malaysia (BNM), Baayah said that it would increase the cost of the people’s debt and reduce their spending.
“Raising the OPR can reduce inflation but will curb economic growth. Every time the OPR goes up, the cost of the people’s debt will go up. If you buy a property for RM300,000, the expenditure will increase by RM120 and that is very burdensome for the people, so do not increase the OPR again after this,” she said.
Meanwhile, a Universiti Utara Malaysia (UUM) College of Business, School of Economics, Finance and Banking’s lecturer, Rusmani Musa, proposed the implementation of a short-term plan to control the price of goods, including reducing import tax on food items, to stabilise local prices.
For the long term, she proposed that the government introduce a policy of ‘one-state one-area’ in agriculture (vegetables) and livestock (chicken, meat and eggs), as these two food groups are the main source of protein for Malaysians.
“If each state depends on its own production of vegetables and chicken, it can directly control the price and allow people to buy at a controlled price.
“Local production, with little dependence on imported goods, will allow effective control of prices. During this period, government assistance of subsidy and technology is very much needed to support local production,” she said.
Source: BERNAMA News Agency