Budget cuts opportunity for ministries to optimise spending, says economist

追加: 2026-05-07

[00:00:01]Malaysia is tightening its belt with the government ordering ministries to cut spending in response to disruptions caused by the Iran oil crisis. [music] Economist Samirul Arif Utman says the cuts are not an austerity measure.

[00:00:14]Rather, they represent a rational response involving tighter fiscal discipline and a more proactive approach to governance. He says that a deferral of non-essential spending and the recalibration of budget priorities >> [music] >> are consistent with established principles of fiscal management amid economic uncertainty.

[00:00:32]>> [music] >> Samirul says fiscal discipline is needed to keep the national economy stable.

[00:00:37]Malaysia consumes 2.3 billion liters of fuel monthly with Putrajaya assuming the burden of keeping pump prices stable [music] through subsidies. But the Treasury warns that the subsidy bill could balloon from 15 billion ringgit to 58.4 billion ringgit this year amid rising demand.

[00:00:55]Samirul warns that the government may not be able to keep fuel prices stable indefinitely.

[00:01:01]For its part, Petronas, acting as a stabilizing agent of last resort, is believed to be absorbing about 650 million ringgit each month to secure adequate fuel supply. [music] That means the national oil company is now tasked with absorbing systemic costs on top of its role as contributor to national revenue.

[00:01:20]Malaysia is not alone in affecting spending cuts. Neighbors Thailand and Vietnam have implemented energy-saving directives, and Indonesia is restricting subsidized [music] fuel. The Philippines has declared a national energy emergency and shortened its work week.

[00:01:36]Samirul says Putrajaya's approach reflects managed fiscal adjustment, balancing between immediate pressures and long-term sustainability.

[00:01:44]Discipline today is needed to preserve resilience tomorrow, >> [music] >> he says.

[00:01:50]Natasha Buest, FMT.