PORT KLANG: The Government is walking a tightrope as it tries to cushion the impact of inflation without worsening the national deficit, Deputy Finance Minister Datuk Donald Lim said.
He added that inflation was a global phenomena which was affecting all countries.
Stating that it was impossible to have a win-win formula, he said the Government was looking to strike the right balance so that both the people and the Government did not lose much.
“If we maintain consumer prices (by maintaining current subsidies), of course the people will be happy, but the Government will have problems balancing its accounts.
“If we increase the prices, then the people will find it difficult to survive. To strike a balance is always difficult,” he said after visiting the world’s largest container vessel The Venus at Westport yesterday.
Lim said when the Budget was tabled last year, the Government had set aside RM10.3bil in subsidies as crude oil then cost between US$85 (RM255) and US$90 (RM270) per barrel compared to US$110 (RM330) now.
He said the inflation rate this year had risen from 2.4% in January to 3.2% in April.
“We feel that inflation will be around 3% or more this year, but it is still low compared to other countries.
“In March, the Philippines recorded a 13% inflation rate and even Singapore’s was 5%,” he said, adding the inflation rate last year was 2%.
Lim advised the people to be more prudent, adding that the Government, too, must control its expenditure.
-The Star-
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