Malaysia to distribute $550 million in cash aid amid rising prices

Vendors outside an MRT station in KL. The cash assistance is aimed at assuaging worries about inflation. PHOTO: BLOOMBERG

KUALA LUMPUR -  The Malaysian government will pay out RM1.74 billion (S$550 million) in aid to low-income households starting this month, in a bid to reduce the impact of soaring living and food costs.

Cash aid of up to RM500 will be given to eligible recipients, said Prime Minister Ismail Sabri Yaakob in a televised address on Wednesday (June 22).

The payment will be made in stages starting from Monday and is expected to benefit nearly 8.6 million people.

The measure is aimed at assuaging worries about inflation, particularly among the so-called B40, or bottom 40 per cent, of the population.

“Taking into account the challenges of the cost of living and the recent rise in food prices, the government has decided to provide additional cash assistance,” Datuk Seri Ismail said.

“This payment will benefit nearly 8.6 million recipients including four million households, 1.2 million senior citizens and 3.4 million singles."

Malaysia’s inflation, as measured by the consumer price index, increased 2.3 per cent in April from a year earlier, led by higher food prices, according to the Department of Statistics on May 25.

Mr Ismail also said temporary subsidies for bottled cooking oil, which were introduced during the Covid-19 pandemic, will be discontinued from July 1, but subsidies for cooking oil in 1kg packets priced at RM2.50 per kg would remain. The actual price of a 1kg packet of cooking oil is RM9.

“The government has decided not to extend the subsidy for bottled cooking oil as of July 1, as it does not meet the initial objective of the programme, which was to help those affected by the pandemic,” he said.

“The government found that the subsidised bottled cooking oil was misused by some in industries, the commercial sector, and smugglers.” 

He was referring to cooking oil in 1kg, 2kg, 3kg and 5kg bottles.

Mr Ismail added that the temporary cooking oil subsidy cost RM55 million per month and was initially slated for only three months from August 2021.

The government spent RM4 billion on cooking oil subsidies in 2022, RM2.2 billion in 2021, and RM500 million in 2020.

The announcement comes ahead of the lifting of price controls on poultry and eggs on July 1.

Domestic Trade and Consumer Affairs Minister Alexander Nanta Linggi said on Tuesday that chicken prices would be floated based on market forces, while targeted financial aid would be given to those in need.

On June 1, Malaysia halted exports of whole chicken amid a domestic supply crunch which saw prices surge beyond the ceiling price of RM8.90 per kg.

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