Country\u2019s inflation rate could be 11.4% if not for subsidies, says Mustapa

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Economy Minister Mustapa Mohamed says the domestic inflation rate is 3.4% this month thanks to the numerous subsidies doled out by the government to ease the people's financial burdens. – The Malaysian Insight file pic, August 21, 2022.

MALAYSIA’s inflation rate could have gone up to 11.4% if the government had not implemented the subsidies, according to Minister in the Prime Minister’s Department (Economy) Mustapa Mohamed. 

He said measures to ease the people’s financial burden through the provision of subsidies, aid and incentives enabled Malaysia to record an inflation rate of 3.4% in July. 

“Of the RM77.7 billion subsidy, the highest subsidy allocation was for petroleum because RON95 is still priced at RM2.05 and diesel at RM2.15, although the international market price had exceeded the price in this country,” he said during the Keluarga Malaysia Symposium: Achievements and Hopes in Putrajaya today. 


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The symposium was officiated by Prime Minister Ismail Sabri Yaakob. 

During his presentation titled Keluarga Malaysia: Overcoming Economic Challenges, Mustapa said the government had allocated RM38.3 billion – almost half of the total amount of subsidy – for RON95, diesel and liquefied petroleum gas. 

Additionally, the government had allocated subsidies for cooking oil (RM4 billion), chicken and eggs (RM1.1 billion), electricity, tolls and others (RM8.2 billion), Keluarga Malaysia assistance (RM8.15 billion) as well as other aid packages and incentives (RM18.1 billion). – Bernama, August 21, 2022.