KUALA LUMPUR, March 31 — Former finance minister Lim Guan Eng has urged the government to introduce immediate financial relief measures for micro, small and medium enterprises (MSMEs) facing rising operational costs linked to the Middle East conflict.

He said escalating logistics expenses, volatile raw material prices and supply chain instability, compounded by concerns over oil prices, were threatening the survival of Malaysian businesses.

“The time is now for the Malaysian government to act immediately to implement financial relief policies for Malaysian businesses, especially micro small and medium enterprises (MSMEs), to save them from a crisis of survival impacted by the escalating costs of the Middle-East war,” Lim said in a statement today.

He added: “Rising logistics costs, raw price volatility, supply chain instability caused by the current Middle East conflict, and Iran’s real threat to force up the price of oil to US$200 per barrel due to its success in closing the Straits of Hormuz to shipping traffic.”

Lim cited warnings from the Federation of Malaysian Manufacturers that Malaysia’s 2026 GDP growth could slow to between 3.8 and 4.2 per cent if the conflict worsens, compared to Bank Negara Malaysia’s projection of 4 to 5 per cent. The SME Association of Malaysia has also called for a targeted six month loan moratorium or repayment deferment for affected MSMEs.

He noted that while Malaysia’s non performing loan ratio stood at 1.4 per cent of total loans as of January 2026, banks had cautioned that financial distress could worsen.

Lim outlined three short term measures he said were urgently needed: a moratorium on bank interest payments until year end; suspension of new taxes and compliance costs including SST increases, e invoicing requirements and higher EPF contributions for foreign workers; and a RM5 billion allocation to provide RM50,000 interest free and collateral free loans to 100,000 MSMEs, alongside targeted grants and subsidies.