IMF backs Malaysia’s decision to impose subsidy cuts, GST
Sumisha Naidu, Channel News Asia
The International Monetary Fund (IMF) has backed the Malaysian government’s decision to cut subsidies this year and eventually introduce a goods and services tax (GST) in the country.
But while the global body lauds what it calls Malaysia’s “timely and comprehensive fiscal reform package”, the public is not necessarily celebrating.
First, fuel subsidies were slashed; next, it was sugar. And then came the announcement that a GST would be introduced in Malaysia in 2015.
Some may call these measures harsh, but to the IMF at least, they are necessary evils.
Speaking at Putrajaya on Monday, IMF Mission Chief for Malaysia Alex Mourmouras said steps like those have kept the nation on track toward its goal of reducing its fiscal deficit to 4 per cent this year.
Mr Mourmouras said: “So the GST, the subsidy rationalisation, the establishment of the fiscal policy committee — these are all elements of a fiscal management and a fiscal policy that we see as timely and welcomed.”
“There is no sense of urgency or crisis but that’s exactly when structural reforms to enhance the efficiency or effectiveness of the fiscal system are needed.”
But to many members of the public, the timing could not have been worse.
