KUALA LUMPUR: The domestic labour market is expected to feel the real impact of the ongoing global energy and geopolitical crisis by June, says Akmal Nasrullah Mohd Nasir.
While the broader domestic economy has yet to experience widespread disruptions, the Economy Minister cautioned that the crisis carries a "lag effect" that will soon hit workers.
"Today we see cost pressures, but it will be a few weeks or months before we see the pressure on jobs and incomes," he said in a briefing after the National Economic Action Council (MTEN) meeting on Tuesday (April 14).
Akmal Nasrullah said a clearer impact on the labour market is expected to emerge in the second quarter of the year, beginning in June, if the global conflict persists.
While sea and land transport, including cargo handling and public transport, remain relatively stable, Akmal Nasrullah noted that the aviation and tourism sectors are already showing clear signs of stress.
"A total of 55 weekly flights involving six airlines were cancelled between March 23 and 28," he said, adding that tourist arrivals had also recorded a decline between March 1 and 25.
Looking ahead, Akmal Nasrullah said the government is projecting a massive drop of 1.5 million flight passengers from the Middle East for the year 2026.
To prevent these external shocks from severely impacting livelihoods, he assured that the government is taking proactive steps.
"The government, through MTEN, is currently studying suitable mitigation measures to ease the public's concerns regarding this issue," he added.
At the same time, Akmal Nasrullah said basic supplies, including rice, chicken, eggs, vegetables, fish, milk and fruits, currently remain stable.
“But, the government must be honest that the pressure is mounting at the production level. Main components such as diesel, fertiliser and animal feed account for about 40% of agricultural output.
“With 63% of the nation’s fertiliser being imported, the government projects animal feed prices to rise around 8% and fertiliser to rise between 15% to 20%.
“This is a signal that cost pressures can be translated to consumer prices if this isn’t addressed early. That is why the government must be proactive, not just reactive,” he said.
Diesel prices in Peninsular Malaysia surged from RM2.99 per litre in February to a high of RM6.72 per litre as of April 9.
There have been various concerns that the continuous spikes in diesel prices would trigger a chain reaction across multiple sectors due to higher operating costs.
