Adjustment following global shocks cannot wait

THE escalation of conflict in the Middle East, particularly around the Strait of Hormuz, has shown how quickly external shocks can reshape economic realities. Within weeks, global oil prices moved from relative stability at between US$65 and US$70 per barrel to levels exceeding US$110, at one point nearing US$120. This sharp increase is a reminder of how fragile stability can be when critical global supply routes are disrupted.

For countries like Malaysia, these developments translate directly into domestic economic pressure. Energy prices feed into transportation costs, food prices and, most significantly, government spending through subsidies.