KUALA LUMPUR (June 30): Government subsidy policies have kept Malaysia’s inflation rate in check, the finance ministry said, adding that Putrajaya will continue to provide subsidies along with cash assistance to protect the rakyat from the rising cost of living burden.

Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the government’s commitment to control the cost of living in the country is reflected in its move to provide an additional subsidy allocation of RM369.5 million for July and August.

This subsidies for chicken and egg announced on Wednesday (June 29) have raised Malaysia’s projected subsidy expenditure for 2022 to RM77.7 billion, he said.

“With this latest announcement, the government has allocated RM1 billion to support the rakyat, namely via the additional chicken and egg subsidies for the two months, as well as the RM630 million cash support initiative which has been paid to the recipients of Bantuan Keluarga Malaysia from June 27,” he added.

"The government is constantly increasing assistance and subsidies to the rakyat to help address the cost of living challenges," Tengku Zafrul said in a statement on Thursday (June 30).

The minister said the inflationary pressures in 2022 is a global phenomenon, with Brent crude oil prices remaining above US$100 (about RM440.75) a barrel since the end of March.

He noted that besides the elevated price of oil, global supply chain disruptions have also affected the supply of fertilisers and livestock feed, which in turn led to a dramatic increase in food prices.

“As an open economy, Malaysia is not exempted from these global inflationary pressures. This means that price increases of goods is completely unavoidable,” he said.

Tengku Zafrul said the inflation rate in developed countries such as the United States and the United Kingdom has extended to 9%. In Thailand, it stands at 7%, while Singapore and the Philippines have crossed 5%.

Citing simulations done by the Department of National Statistics Malaysia, the minister said Malaysia’s May inflation rate could have reached 11.4%, but this was evaded with the help of the government's subsidies, which curbed it to 2.8%.

The government on Wednesday announced a new ceiling price for chicken at RM9.40 per kg — 50 sen higher than the previous limit of RM8.90. Meanwhile, the maximum price for Grade B eggs was fixed at 43 sen per seed and for Grade C eggs at 41 sen.

The minister said Malaysia has among the lowest chicken prices in the region. In Singapore, chicken is sold for RM24.25 per kg, followed by Vietnam at RM23.09, the Philippines at RM16.59, Brunei at RM14.65, Indonesia at RM12.44, and Thailand at RM11.65.

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