Fiscal challenges await PM

The people’s PM: Anwar meeting well-wishers at Precinct 8, Putrajaya, before Friday prayers. — KAMARUL ARIFFIN/The Star

PETALING JAYA: Datuk Seri Anwar Ibrahim beat his political challenges and now the Prime Minister will have to face a horde of fiscal ones.

These include bread-and-butter issues such as inflation and revitalising the economy, political observers said. The priority is Budget 2023.

“The most pressing issue is the rising cost of living.

“He has said he would meet with relevant agencies this weekend to find ways to tackle this issue,” said political pundit Dr Tunku Mohar Tunku Mohd Mokhtar of the International Islamic University Malaysia.

He added that people expect Anwar to be fair, help the poor, eradicate corruption, tackle inter-ethnic relations issues, and restore investor confidence.

Senior Fellow at the Malaysian Institute of Economic Research Dr Shankaran Nambiar said the country’s economy, which has lost momentum, needs a reset and that will be Anwar’s task for the next five years.

“Everything from short-term problems to long-term structural issues must be re-examined. This is not easy. The order of priority would be to solve the more immediate and pressing issues,” he said.

Among the structural issues are reforms to education and building talent, higher productivity and technology upgrading.

“He has promised to improve the healthcare system and create a more humane economy. These will be long-term challenges,” said Shankaran.

Prof Geoffrey Williams of Malaysia University of Science and Technology warned that there would be an economic slowdown and lingering inflation problem that would affect the cost of living, incomes and jobs.

“People are still struggling from the fallout of the (pandemic) lockdowns and they need help. Subsidy reform must move from controlling prices to helping incomes,” he said.

Malaysia faces the same challenges as many countries in maintaining growth and controlling inflation, but the country has done relatively better than its regional peers, he added.

“Inflation has ticked up but controlled with subsidies and price caps. It has likely peaked and will moderate next year.

“In October, it fell to 4% from 4.5% in September and 4.7% in August, so it’s easing off,” he said.