PETALING JAYA: Malaysian businesses are bracing for higher costs, tighter cash flow and a weaker outlook over the next six months as global oil shocks ripple through the economy, according to the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
Its president Datuk Ng Yih Pyng said the ongoing conflict in the Middle East was pushing up fuel and energy costs, creating "significant and immediate" challenges.
"Businesses are facing rising cost pressures and short visibility on supplies, made worse by soaring fuel prices which are financially unbearable for firms not covered by the Budi 95 subsidised fuel fleet card mechanism," he said in a statement on Wednesday (April 1).
An ACCCIM survey of 203 companies found that most respondents expect business conditions to deteriorate if oil prices remain elevated. Micro, small and medium enterprises (MSMEs) made up 95.1% of those polled.
The survey showed that energy is a key cost component, with 44.3% saying it accounts for more than 10% of their operating expenses.
As a result, 51.2% of respondents expect total costs to increase by between 6% and 20%. About 31% of firms said they could only sustain operations for three to six months before needing to downsize if the shock persists.
To cushion the impact, ACCCIM has proposed targeted loan repayment assistance for MSMEs and a reduction in the CP204 tax requirement so firms only pay 50% of last year’s estimated tax.
Ng also suggested temporary waivers of port and transport charges to ease logistics pressures, alongside targeted subsidies for agriculture and tourism.
He added that if conditions worsen, authorities should consider reducing interest rates or reintroducing wage subsidies to prevent mass layoffs.
"These measures can help businesses cope with prolonged oil shocks, protect jobs and reduce the risk of large-scale closures," Ng said.
