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Thursday, October 31, 2013

Abdul Wahid: M'sia to see minimal inflation rate hike from subsidy rationalisation

Published: Wednesday October 30, 2013 MYT 2:55:00 PM 
Updated: Wednesday October 30, 2013 MYT 2:57:56 PM

KUALA LUMPUR: Malaysia will see minimal inflation rate hike following subsidy rationalisation, including the increase in sugar price, Minister in the Prime Minister's Department Datuk Seri Abdul Wahid Omar said today. 

"With the subsidy rationalisation, we do expect the inflation rate to actually increase but within the context of the current inflation rate, which is actually low. So, the rate will be quite acceptable in the sense. 

"The government will soon announce the inflation rate after taking into account the sugar price hike," he told reporters on the sidelines of the Fourth Annual Public-Private Partnership Conference 2013 - Updates on Global and Regional Trends with Special Focus on Renewable Energy Development.

The consumer Price Index for September 2013 registered a 2.6% increase to 107.9 from 105.2 a year ago.The government is committed to reducing the country's fiscal deficit gradually to achieve a balanced budget by 2020.

Tabling the 2014 Budget last Friday, Prime Minister Datuk Seri Najib Tun Razak said the government was on track to ease its fiscal deficit from 4.5% of the Gross Domestic Product (GDP) in 2012 to four per cent of the GDP this year and 3.5% of the GDP next year.

As part of the government's fiscal consolidation measures, Najib also announced the implementation of the goods and services tax (GST) from April 1, 2015, at 6% to replace the existing sales and services tax.

"We do expect up to 1.8% increase in CPI in the first year of the GST implementation, it will be one-off," he said.

Earlier, in his speech, Abdul Wahid said private investments are expected to increase to RM189bil or 17.9% of the GDP next year, as the government will pursue better targeted, efficient and effective government spending.

He said the government would continue the nation's development agenda through public-private partnership (PPP). 

"Over the past 30 years, between 1983 and 2013, 611 projects were implemented through the PPP mechanism. The savings generated through the PPP initiative has helped the government save RM182.5bil," he added. - Bernama

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