Malaysia may miss deficit target as fuel subsidies hit RM7bn monthly
Finance Minister Amir Hamzah Azizan warned the 3.5% deficit target is at risk after fuel subsidies exploded to RM7 billion in April alone, roughly 10 times pre-Iran war levels. The government cut RON95 petrol quotas from 300 to 200 litres per month to contain costs, potentially saving RM5 billion annually. Oil prices near $100 per barrel are forcing a choice between fiscal discipline and political survival. With elections looming, deeper subsidy cuts risk backlash, but the current path threatens Malaysia's medium-term consolidation plan.
Sources
- Malaysia fuel subsidy bill — Bloomberg
- Malaysia subsidy reform — Stratfor
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