Malaysia keeps inflation outlook for 2024 after diesel subsidy reforms

Treasury secretary-general Datuk Johan Mahmood Merican.

KUALA LUMPUR: Headline inflation in Malaysia is expected to remain within the government's projected range of 2% to 3.5% for 2024, following the reform of diesel subsidies that began this month, a treasury official said on Thursday.

Diesel fuel prices in much of Malaysia rose by more than 50% on Monday as the government launched its long-promised effort to shift away from costly blanket subsidies towards a targeted approach that mainly helps low-income groups.

Treasury Secretary-General Johan Mahmood Merican said aid redirected from the subsidy cuts and exemptions for some diesel users were expected to keep rising prices in check.

"The impact of inflation is such that it will still remain within the official band," he told a conference on structural reforms on Thursday.

He did not say whether the government's outlook would change following adjustments to other blanket subsidies, such as for RON95 petrol, also expected to begin this year.

Malaysia heavily subsidises the costs of items such as cooking oil, rice and other fuels - an expense that has ballooned in recent years, straining government coffers. - Reuters

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