OF DIESEL, EGGS & A VERY 'GEDIK' MINISTER - BRICKBATS POUR IN FOR ANWAR OVER 'GIDDY-GOAT' SUBSIDIES - EVEN AS INFLATION GETS READY TO SOAR AGAIN
Written by Stan Lee, PoliticsNow!
KUALA LUMPUR (politicsnowmy.blogspot.com) - With inflation showing no sign of petering out, public dissatisfaction with Prime Minister Anwar Ibrahim for doling out a meagre 3 sen reduction in egg prices as 'consolation' after sharply hiking diesel prices by 55% has reignited a storm of criticism from political rivals and even from those aligned to his government.
"The policies are clearly not well thought-out, causing the public to bear the brunt of this reckless approach in the form of higher living costs and even a decline in consumer spending that could hurt economic growth," Wee Jeck Seng, a vice president at ally party MCA, said in a statement to PoliticsNow!
According to Wee, it was "paradoxical" to allocate RM100 million to subsidise the egg price reduction when the government had just cut the subsidy for diesel to trim national debt. To Wee, the egg subsidy would do little to help Malaysians who are struggling to keep above water as prices of food and other living costs skyrocket following other hikes, in particular more expensive electricity tariffs.
"Does the government believe a 90-sen discount for a tray of eggs will suddenly make Malaysian families eat eggs for every meal? " asked Wee.
"Will a 3-sen price drop per egg truly incentivise businesses to lower their prices? Will it meaningfully lessen the expenses of low and middle income families?"
He warned Anwar not to take the ripple effect from the diesel price rise lightly - pointing out it could lead to business closures and weaken the overall economy further.
"Government policies need to be more grounded and address the most immediate concerns of citizens. This domino effect of rising prices for all goods will lead to a decrease in consumer spending. Ultimately, this cycle could result in business closures due to unsold goods, further weakening the national economy," said Wee.
"AN ABSOLUTE DISASTER" & MR 'OVER-EAGER'
Former health minister Khairy Jamaluddin also expressed disappointment - lambasting Fahmi Fadzil, the communications minister, for overhyping the eggs announcement and misleading the public into hoping that Anwar would unveil something more substantial or significant that could really help them weather the storm of inflation that has ravaged the country since Anwar and his ruling Pakatan Harapan coalition swept into power in 2022.
“It was an absolute disaster,” Khairy said on his Keluar Sekejap podcast. “It should have been good news which would have increased support for the government and the prime minister.
“So a communication failure … 100% communication failure due to that very 'gedik’ (eager) government spokesperson,” said Khairy, referring to Fahmi who is also the spokesman for the government.
IS THAT ALL?
Khairy Jamaluddin
Former prime minister Muhyiddin Yassin, who now leads the PN main opposition block too spoke up.
“I thank the prime minister for reducing the price of eggs by three sen except that I thought the prime minister would be announcing a comprehensive mechanism to reduce prices of goods,” Muhyiddin said in a post on Facebook that dripped with sarcasm.
According to the ex-premier, Anwar should have announced a RM4 billion package to help the people instead of merely reducing egg prices.
Muhyiddin said the government should have announced a RM4 billion package, which would be equivalent to the savings anticipated from the removal of the diesel subsidy, to help the people instead of merely reducing egg prices.
“However, what was announced was a reduction in egg prices, which would only cost the government about RM100 million," said Muhyiddin, whose Bersatu party is set to challenge Anwar in six by-elections if the Parliament speaker agrees to declare the seats vacant.
INFLATION NOT GOING AWAY ANYTIME SOON
Meanwhile, the Economist Intelligence Unit (EIU) in a report warned against optimism on the inflation front, predicting that the lethal cocktail of higher oil prices and currency depreciation now devastating economies worldwide was set to persist.
Asian nations including Malaysia would not be spared, with their currencies vulnerable to further loss in value as the US central bank delays lowering its key interest rate.
While Malaysia is a net exporter of oil and many manufactured goods, its weak ringgit has opened the door to 'imported inflation' with many consumer goods and essentials having shot up in price. Overall, although national oil firm Petronas and the manufacturing industry have benefited from the ringgit falling to historic lows, the man on the street has suffered tremendously from the sudden and sharp rise in costs of living.
"Intensifying external pressures on Asian central banks—higher oil prices and currency depreciation—will delay a switch to policy easing. The extent of the shift depends on the size of the shock, its transmission to the domestic economy and how it plays into the balance of risks facing policymakers," wrote the EIU in a statement sent to PoliticsNow!
"External conditions have turned less favourable in recent weeks for central banks in Asia. First, oil prices have risen and are likely to remain higher for longer. EIU now expects Brent crude to average US$87.5/barrel in 2024 (previously US$80.6/b), as the global oil market remains in deficit because of OPEC+ output cuts and stronger-than-anticipated demand. As the vast majority of countries in Asia are net oil importers, inflation will be higher as a result."
"Asian currencies have come under increased pressure from capital outflows as investors roll back their expectations for interest-rate cuts by the Federal Reserve (Fed, the US central bank). More muted anticipation of US policy easing is now driving wider interest-rate differentials between Asian economies and the US. EIU now does not expect the Fed to cut rates until September, at the earliest."
"The extent to which global oil prices pass through to the domestic consumer price index (CPI) depends on both direct effects, mainly through fuel and transport prices, and the indirect impact on the cost of producing everything else. The direct impacts generally dominate, so, with higher weights for fuel in their CPIs, emerging economies will be harder hit by high oil prices," said the EIU report.
Written by Stan Lee, PoliticsNow!
https://politicsnowmy.blogspot.com/
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