Malaysia Minister on Fuel Subsidy, Deficit Goals

Malaysia may miss its 2026 fiscal deficit targets due to rising fuel subsidy costs, driven by the ongoing conflict in Iran. Second Finance Minister Amir Hamzah Azizan stated this in an exclusive interview with Bloomberg's Haslinda Amin at the Invest Malaysia event. The minister indicated that the government is reviewing the current subsidy rationalization plan, which was initially projected to save RM4 billion annually. He also mentioned that the government is considering various options to manage the national debt, which stood at RM1.2 trillion as of the end of 2023, representing 50.4% of the country's Gross Domestic Product (GDP). The government aims to reduce the debt-to-GDP ratio to below 45% by 2025. Azizan further elaborated that the Ministry of Finance is working on a comprehensive strategy to ensure fiscal sustainability and economic resilience amidst global economic uncertainties. This strategy includes enhancing revenue collection, optimizing expenditure, and attracting foreign direct investment. The minister stressed the importance of fiscal discipline to maintain investor confidence and support long-term economic growth.