KUALA LUMPUR, June 13 — Headline inflation in the country is expected to remain within the government’s projected range of 2 per cent to 3.5 per cent this year, following diesel subsidy reforms that began this month, a Treasury official said today.
Diesel prices rose by more than 50 per cent on Monday as the government launched its long-promised effort to shift away from costly blanket subsidies towards a targeted approach that mainly helps low-income groups.
Treasury secretary-general Johan Mahmood Merican said aid redirected from the subsidy cuts and exemptions for some diesel users were expected to keep rising prices in check.
“The impact of inflation is such that it will still remain within the official band,” he told a conference on structural reforms today.
He did not say whether the government’s outlook would change after adjustments to other blanket subsidies, such as for RON95, also expected to begin this year.
The country heavily subsidises costs of items such as cooking oil, rice and other fuels — an expense that has ballooned in recent years, straining government coffers.
— Reuters
