PETALING JAYA, Jan 29 — Opposition Leader Datuk Seri Anwar Ibrahim urged the government to stop cutting subsidies to help temper the rising cost of living.
The annual rate of inflation, as measured by the Consumer Prices Index, reached 3.2 per cent in November, the highest in just over two years after the government cut fuel subsidies in September.
Citing a recent report by the Standard Chartered Bank, he said headline inflation is expected to rise to 3.4 per cent over the next nine months.
“The projection is the highest in the region,” said Anwar, adding that it is rising is due to austerity measures rolled out by Prime Minister Datuk Seri Najib Razak, who is also the finance minister.
Subsidy rationalisation appears to be a retrograde move as the economic outlook is far less favourable than before, he added.
A decision to stop subsidy cuts will help keep price increases in check, he said.
“If inflation remains high, Bank Negara will have to increase interest rates and this will affect all consumers,” he added.
The central bank has left its benchmark interest rate unchanged since mid-2011 but many economists expect a rate increase in the second half of the year.
After winning the general election held in May last year, Najib’s government embarked on a series of subsidy cuts starting from September, leading to increases in the price of petrol, sugar and electricity.
