KUALA LUMPUR: Malaysia is expected to fork out higher total subsidies in 2022 to the tune of RM71 billion, while petrol subsidies alone will touch RM30 billion amid the rise in crude oil prices.
Speaking at the World Economic Forum's Annual Meeting in Davos, Switzerland, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the higher subsidies had resulted in lower core inflation rate at 2.3 per cent.
ALSO READ: Talks on fuel subsidies ongoing
Although inflation is on the rise, he said Malaysia is lucky because the country has commodity resources, unlike other countries in the region which do not have the opportunity to create revenue from the increase in commodity prices to cushion the impact of fuel prices.
Tengku Zafrul was one of the panellists at a session titled "Global Risks in an Era of Turbulence".
Asked whether Asian governments were able to maintain or support the price of rice for the people, Tengku Zafrul said there is a lot of government assistance to ensure that supply is secured, and at the same time, large amount of subsidies are allocated so that the price is maintained given the importance of rice to Malaysians.
On China's threat to the South China Sea, the finance minister stressed that as China is Malaysia’s largest trading partner, Malaysia will continue to engage China rather than not engage the republic.
"We are also hoping that what is happening in China especially the lockdown would not disrupt the supply chain too much," he added.
Tengku Zafrul noted that the current lockdown in China has an impact on all its trading partners.
"The lockdown has been more severe than before and longer than what we have anticipated, although it will have a positive impact once it is lifted.
"If you are talking about the spillover once China starts to lift the lockdown, I think it will be positive and manageable," he added. - Bernama