Malaysia University of Science and Technology economics professor Geoffrey Williams said the new electricity tariff hike will protect households and SMEs that cannot afford price increases.
Meanwhile, Williams said it was a good announcement by Anwar, as it will not have an adverse impact on big companies and at the same time, it provides a form of relief for small companies. “If the government went further and tariffs were cut back to previous levels, then inflation could be 0.3% lower, according to our analysis. This option is still open in the future,” added Geoffrey.
“With more prudent government spending and increased revenue from higher oil and gas prices, the government may be able to cope with the additional subsidy burden,” he said when contacted. He said the export-oriented sectors are better positioned to absorb higher utility costs due to the undervalued ringgit.
However, for the electricity tariff hike on big businesses, Carmelo said the matter should be approached in a more holistic manner.