Latest news with #AhmedRazman
The Sun
22-05-2025
- Business
- The Sun
ASEAN urged to unite on US tariff response
KUALA LUMPUR: The ASEAN bloc should adopt a unified stance when negotiating retaliatory tariffs imposed by the United States (US) to ensure equitable benefits for all member states, said Putra Business School (PBS) MBA Programme Director Associate Professor Dr Ahmed Razman Abdul Latiff. He said Malaysia should take the lead in persuading fellow ASEAN nations to speak with one voice in negotiations over the tariffs introduced during the administration of US President Donald Trump. 'Individually, ASEAN countries lack the economic clout to counter US trade measures, but a united front would represent a formidable regional force,' he said during a special broadcast on the 46th ASEAN Summit aired on Bernama TV on Wednesday. Ahmed Razman said ASEAN needs a consensus-based strategy. 'Imagine a region aiming to strengthen ties with China, but if each country goes it alone, we are simply playing by the US's rules. 'There is a saying, 'united we stand, divided we fall' – and now is the time to make that real. This is something Malaysia, as ASEAN Chair, must fully embrace,' he added. Ahmed Razman also stressed that boosting intra-ASEAN trade must begin with increasing domestic demand across the region, home to about 700 million people. 'Demand stems from consumers' purchasing power. If people cannot afford goods, or demand is weak, trade cannot grow,' he said. Malaysia, as Chair and host of ASEAN 2025, will convene the 46th ASEAN Summit and Related Summits at the Kuala Lumpur Convention Centre from May 26. Two high-level meetings are also scheduled alongside the summit, the 2nd ASEAN-Gulf Cooperation Council (GCC) Summit and the ASEAN-GCC-China Summit, both seen as key platforms for strengthening regional and inter-regional cooperation.
The Sun
22-05-2025
- Business
- The Sun
ASEAN to unite on US tariff response, says economist
KUALA LUMPUR: The ASEAN bloc should adopt a unified stance when negotiating retaliatory tariffs imposed by the United States (US) to ensure equitable benefits for all member states, said Putra Business School (PBS) MBA Programme Director Associate Professor Dr Ahmed Razman Abdul Latiff. He said Malaysia should take the lead in persuading fellow ASEAN nations to speak with one voice in negotiations over the tariffs introduced during the administration of US President Donald Trump. 'Individually, ASEAN countries lack the economic clout to counter US trade measures, but a united front would represent a formidable regional force,' he said during a special broadcast on the 46th ASEAN Summit aired on Bernama TV on Wednesday. Ahmed Razman said ASEAN needs a consensus-based strategy. 'Imagine a region aiming to strengthen ties with China, but if each country goes it alone, we are simply playing by the US's rules. 'There is a saying, 'united we stand, divided we fall' – and now is the time to make that real. This is something Malaysia, as ASEAN Chair, must fully embrace,' he added. Ahmed Razman also stressed that boosting intra-ASEAN trade must begin with increasing domestic demand across the region, home to about 700 million people. 'Demand stems from consumers' purchasing power. If people cannot afford goods, or demand is weak, trade cannot grow,' he said. Malaysia, as Chair and host of ASEAN 2025, will convene the 46th ASEAN Summit and Related Summits at the Kuala Lumpur Convention Centre from May 26. Two high-level meetings are also scheduled alongside the summit, the 2nd ASEAN-Gulf Cooperation Council (GCC) Summit and the ASEAN-GCC-China Summit, both seen as key platforms for strengthening regional and inter-regional cooperation.
New Straits Times
20-05-2025
- Business
- New Straits Times
SRR cut unlocks liquidity, but credit growth tied to confidence
KUALA LUMPUR: Bank Negara Malaysia's surprise move to reduce the statutory reserve requirement (SRR) by 100 basis points effective May 16 is widely seen by economists as a timely liquidity-enhancing measure, with potential implications for credit growth and future monetary policy decisions. The central bank said the move was aimed at bolstering liquidity in the domestic financial system and is estimated to inject approximately RM19 billion into the banking system. Putra Business School economist Professor Dr Ahmed Razman Abdul Latiff said the move could support economic growth in the second half of 2025 by allowing banks to ramp up lending. However, Ahmed Razman cautioned that the overall impact would still hinge on prevailing market sentiment and geopolitical developments. "This injection of liquidity could translate into more active lending by banks, but it ultimately depends on consumer and business confidence, especially in light of global uncertainties and the current overnight policy rate (OPR)," he told the Business Times. Ahmed Razman also noted that the SRR cut could be interpreted as a potential precursor to an OPR cut, though such a sequence is rare. However, he believes the move to reduce the SSR ratio seems unexpected since Bank Negara can also boost liquidity by doing the more direct approach of reducing OPR. "Cutting down SSR ratio to one per cent might lead to little option in the future to support the market growth since cutting down the SSR is always regarded as among the last choices," he said. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the SRR cut would accelerate lending, as funds previously parked under SRR earning zero interest can now be deployed. With the SRR now at one per cent, Afzanizam said banks will have an additional RM19 billion to channel into lending for consumers, including mortgages, personal loans and hire purchase, as well as for businesses. "And not to mention, they also can invest in govt securities and bonds or sukuk that will yield certain returns. All this will help to support domestic demand such as consumption and investment," he said. On whether the SRR reduction is paving the way for an OPR cut, Afzanizam said it remains a possibility, depending on the economic fallout from global tariff shocks. "Monetary policy decisions are highly dynamic, and Bank Negara has a suite of tools at its disposal. On that note, the OPR decision will be deployed in a timely fashion, depending on the severity of the impact from the tariff shock," he said. In a recent report, Moody's Analytics economist Sunny Nguyen said the SRR cut gives Bank Negara crucial breathing room to evaluate several moving parts in the global economic environment. These include the impact of US-led trade tariffs, the trajectory of inflation, and the policy direction of the US Federal Reserve (Fed). "A lower SRR allows banks to lend more, boosting economic growth by increasing credit availability. Liquidity injections are the policy equivalent of loosening your tie in case you decide to change shirts," she said. Nguyen noted that in the past, namely in 2009, 2016 and 2020, the central bank's playbook when markets were jumpy and the ringgit was on the defensive opened with an SRR cut. Once data confirmed an economic slowdown and inflation was no longer a concern, it followed with rate cuts. "Will that pattern repeat? The odds favour a 25‐basis point rate cut to 2.75 per cent in September, so long as the headline CPI stays convincingly below 3 per cent year on year. "And the Fed must resume its easing cycle, something futures markets are tentatively signalling will happen in September," she said. Nguyen expects Bank Negara to maintain the OPR at 3.00 per cent until at least August. However, she anticipates a 25 basis point cut to 2.75 per cent in September, provided inflationary pressures ease and the Fed begins its own rate-lowering cycle. Economist Dr Geoffrey Williams said while the SRR cut frees up more liquidity for lending, actual credit expansion depends on demand from businesses and consumers. "If businesses and consumers are willing to take loans, the RM19 billion becomes an effective stimulus. But if demand is weak, banks will simply hold the funds. "This move keeps commercial interest rates more stable and aligned with the OPR, helping ensure that the cost of borrowing does not rise unnecessarily," he said. In addition, Williams also highlighted that Bank Negara's use of the SRR reflects a prudential approach to monetary management, rather than immediately adjusting the OPR. "At the moment inflationary pressures are moderate, growth is strong and banks are well capitalised so there is no need for a cut in the OPR. "So it is a good move given uncertainty in the global market and avoids changing the OPR and monetary policy stance which are in good shape. "Overall, I think it is a signal of prudential management rather than a signal of a likely change in policy," he added.
New Straits Times
17-05-2025
- Business
- New Straits Times
Growth momentum expected to soften this year
KUALA LUMPUR: Malaysia continues to show resilience with a solid economic outturn, despite gross domestic product (GDP) growth moderating to 4.4 per cent in the first quarter (Q1) of 2025 from 4.9 per cent in the previous quarter, economists said. The latest Q1 GDP data provides crucial insights into early 2025 developments and offers a glimpse into the country's growth trajectory for the remainder of the year amid trade tensions and geo-political uncertainties, they added. "While the 4.4 per cent growth outpaces the 4.2 per cent recorded in Q1 2024, it marks the lowest quarterly expansion in the past three quarters, indicating a softening trend amid a challenging global backdrop. "This is expected as this year faced many global uncertainties in geopolitical and conflict crises, notwithstanding climate and supply chain crises," Putra Business School economic analyst Prof Dr Ahmed Razman Abdul told the Business Times. Nevertheless, Ahmed Razman said fear of reciprocal tariff had led to surge of demand from the US importers in the first quarter of the year. "For the remaining quarters of the year, it is expected that the growth remains positive but moderate as the World Bank has also revised the Malaysian 2025 growth to 3.9 per cent," he said. Echoing the views, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the moderation was expected, but the underlying fundamentals remain intact. Afzanizam noted that the country's dual growth engines (domestic demand and net exports) remained positive, expanding by 6.0 per cent and 19.6 per cent respectively, although at a slower pace compared to the final quarter of 2024. "Bank Negara Malaysia has explicitly mentioned the external condition is going to be very challenging which warrants a review in the current GDP forecast of 4.5 to 5.5 per cent for 2025. "I think it makes sense for them to wait as the negotiations are still ongoing with the US and the recent concession between the US and China indicates that the intensity of the tariff shocks would be manageable. "Having said that, the authorities remain vigilant about the external risks and have been responding appropriately," he said. In addition, economist Dr Geoffrey Williams said the latest Q1 2025 data shows strong performance given uncertainties and lays a good foundation for the rest of the year. He noted that there was a stronger-than-expected 6.8 per cent annual rise in exports in March, when shipments to the United States rose 50.8 per cent to a record RM22.66 billion (US$5.14 billion). "The tariff issues are under negotiation and we expect them to be resolved following the example of the UK and China. This will mean that the outlook for the second half of the year will be better if there is a good negotiation outcome," he said. Earlier today, Bank Negara announced that Malaysia's economy expanded by 4.4 per cent in the first quarter of 2025, underpinned by resilient consumer spending and sustained growth in investment. The latest growth figure reflects a slight slowdown from the five per cent expansion registered in the fourth quarter of 2024. On headline inflation, Bank Negara said it had moderated to 1.5 per cent in Q1 2025 from 1.8 per cent in Q4 2024. The moderation was largely due to lower utilities inflation at 3.0 per cent from 18.1 per cent in Q4 2024. Core inflation, however, edged higher to 1.9 per cent from 1.7 per cent in Q4 2024, driven mainly by rental inflation, which rose to 2.1 per cent, it added.
Barnama
01-05-2025
- Business
- Barnama
MALAYSIA'S GREAT SHIFT: NAVIGATING THE HIGH STAKES OF TARGETED SUBSIDIES
The government's plan to gradually remove blanket subsidies – beginning with diesel and potentially extending to RON95 petrol – has sparked public concern and policy debate. KUALA LUMPUR, April 23 (Bernama) -- As Malaysia embarks on one of the most ambitious reforms to its economic framework in recent decades, the issue of targeted subsidy for diesel has taken centre stage. 'We have been subsidising fuels and essential goods across the board for decades. But the reality is, much of this has benefited those who do not need it. Roughly 35 per cent of fuel subsidies go to the top 20 per cent (T20) income group. That is not efficient or fair,' he told Bernama in an interview. But beyond the noise lies a compelling economic case backed by fiscal necessity, long-term sustainability, and a more equitable approach to welfare. These savings, he noted, have already been reflected in expanded allocations to direct financial aid programmes such as the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), which together amount to over RM13 billion in 2024. The government's targeted subsidy for diesel was implemented in phases from last year and is expected to save up to RM4 billion annually. Ahmed Razman argues that by rationalising subsidies, Malaysia can redirect billions in savings to more impactful areas such as infrastructure development, social welfare, education, and healthcare — sectors that benefit society more broadly. During the tabling of Budget 2025, Prime Minister Datuk Seri Anwar Ibrahim said the move had proven effective in curbing leakages due to smuggling and usage by the ineligible business sector. Since the implementation, subsidised diesel sales have dropped by 30 per cent, resulting in savings of over RM600 million per month, even though subsidies are still provided for public transport, fishermen, and the logistics sector. Impact of sweeping US tariffs on Malaysia The urgency of Malaysia's targeted subsidy is further amplified by mounting global economic uncertainties, including the resurgence of trade tensions and volatile energy markets. On April 2, United States (US) President Donald Trump announced reciprocal tariffs on its trading partners, imposing a 24 per cent tariff on Malaysia. However, seven days after that, he announced a 90-day pause for the reciprocal tariffs, allowing affected countries to negotiate. While this may offer short-term relief, the broader impact of rising US-China trade tensions looms large. International Islamic University Malaysia (IIUM) Associate Professor of Economics Dr Muhammad Irwan Ariffin said a coordinated response is crucial to safeguard economic resilience and maintain public confidence. 'Malaysia's best course is to act in concert with ASEAN partners, leveraging collective strength to manage global trade headwinds,' said Muhammad Irwan, adding that targeted subsidies are necessary to ensure long-term fiscal sustainability and to free up resources for better-targeted social protection and development spending. 'It is therefore timely and necessary to move towards a more targeted, data-driven approach. Targeted petrol subsidies should be part of a broader strategy to build a stronger and fairer economic model,' he added. Ahmed Razman echoed this, saying that Malaysia had already planned for targeted subsidies, and the tariff war would probably provide more justification for the move so that deserving groups continue to receive assistance from the government. Apart from that, the decline in global oil prices also offers an opportunity for the government to move forward with targeted fuel subsidies. At the time of writing, Brent crude was 1.50 per cent lower at US$66.87 per barrel. Moving from Blanket to Targeted Aid Muhammad Irwan said the issue was not whether Malaysia should remove subsidies, but how it should be done. He emphasised that the shift to targeted aid is essential to ensure fiscal discipline while protecting vulnerable groups. Muhammad Irwan pointed out that targeted subsidies must go hand-in-hand with structural reforms to uplift incomes, especially in the middle-income group. 'Direct cash transfers can cushion the blow in the short term, but they won't solve the median income squeeze. We need upskilling, progressive wages, and industry-education alignment to help Malaysians move up the income ladder,' he added. To further alleviate the burden of high prices, the MADANI government has expanded SARA to benefit 5.4 million recipients starting April 1, a significant increase from the current 700,000 beneficiaries. SARA is a targeted assistance approach, redistributing part of the nation's increased revenue and subsidy savings to those genuinely in need. Starting this year, the distribution of SARA via MyKad has been extended to Sabah, Sarawak, and Labuan. Last year, usage was limited to Peninsular Malaysia. Taming Inflation and Ensuring Enforcement Among the most common public fears associated with targeted subsidies for diesel is inflation. Both academicians acknowledge this as a valid concern, but one that can be managed with the right strategy. 'RON95 rationalisation will have an inflationary effect, no doubt. But our current inflation rate is still around 1.8 per cent, well below historical averages. With strong enforcement of price controls and technological monitoring, the increase should remain within the 2.0–4.0 per cent range,' Ahmed Razman said. Muhammad Irwan noted that inflation must be tackled from both ends: controlling unnecessary price hikes and supporting household purchasing power. 'We must ensure that necessities such as food, utilities, and basic transport remain affordable. Enforcement must be strengthened, and not just manually. We need artificial intelligence (AI)-driven systems, e-wallet tracking, and integrated monitoring to prevent profiteering and smuggling,' he said. He stressed that price control efforts should prioritise essential goods, even if producers justify increases by pointing to higher fuel costs. 'This is where the principle of amanah (trust) in Islamic economics comes into play. Public wealth must be managed with integrity,' Muhammad Irwan said. A Digital Infrastructure for Fair Distribution At the heart of any successful subsidy rationalisation effort is one crucial ingredient: accurate data, which allows the government to pinpoint exactly who needs help and ensure support reaches the right people. While Malaysia has made encouraging progress with its Central Database Hub (PADU) database, both academicians agree that it remains a work in progress. 'PADU is promising, but we need full adult registration. Right now, only about half are in the system. Without a complete and accurate database, you risk exclusion errors -- missing people who actually need help,' Ahmed Razman said. Muhammad Irwan noted that a more seamless registration and application process, especially via smartphones and digital ID systems like MyKad, would be crucial to delivering aid swiftly and fairly. The use of MyKad to distribute SARA is not only efficient but enables the public to use the aid simply by swiping the card at participating stores. It is not only fast but also secure, allowing a smooth buying experience without hassle. The RON95 Test: Lessons from Diesel Reform While the targeted subsidy for diesel has affected a relatively narrower user base, RON95 petrol presents a much more complex challenge. It is used by the vast majority of Malaysians across all income groups. Implementing a fair and efficient RON95 rationalisation requires careful planning, extensive simulations, and a robust rollout mechanism. 'This is going to be a massive logistical undertaking. We're talking about thousands of petrol stations and millions of users. It can't be rushed,' Ahmed Razman said. He noted that the government had been preparing for this shift for years, introducing digital payment habits through e-wallet incentives and piloting aid distribution mechanisms, but challenges persist. Finance Minister II Datuk Seri Amir Hamzah Azizan previously said that a two-tier pricing system for targeted RON95 implementation in June would involve the use of MyKad to facilitate the targeted petrol subsidy. Currently, the mechanism for the RON95 targeted subsidy is being fine-tuned to ensure it is secure, efficient, and reliable upon rollout. Amir Hamzah also gave assurance that about 85 per cent of Malaysians will continue to enjoy subsidised petrol, reflecting the true intent of a targeted subsidy, which is to channel support to those who genuinely need it. Shifting the Narrative: From Resistance to Responsibility Beyond policy and systems lies perhaps the greatest hurdle — the public sentiment. To succeed, the government must not only execute the policy well but also win over the hearts and minds of the people. 'Malaysians need to understand why this is happening, and how it benefits them in the long run. Communication is key—not just through official announcements, but also through social media, influencers, and community leaders,' Ahmed Razman said. Meanwhile, Muhammad Irwan believes that values-driven messaging could help frame the issue in a more constructive light. 'In Islamic economics, there's a strong emphasis on intergenerational justice. Are we willing to enjoy unsustainable subsidies today and pass on debt to our children? That's not ethical,' he said. Conclusion: A Chance for Reform, A Moment for Unity Targeted subsidies are not a magic bullet, but they may represent Malaysia's best chance at realigning its economy toward sustainability, equity, and resilience. If executed with care and supported by well-crafted policies and strategies, the pain can be short-lived and the rewards lasting. 'This is not just a fiscal adjustment. It is a chance to rebuild trust, improve targeting, and reform the way we support Malaysians in need.' Ahmed Razman said. Muhammad Irwan added that it is a painful exercise, but one that must be done — and done right — for future generations. All in all, the MADANI Framework enhances livelihoods by replacing blanket subsidies with targeted assistance, ensuring vulnerable groups receive the support they need. It also fulfils the 'Raising the Floor' pillar of the MADANI economy framework, through which the government aims to improve income and living standards for the rakyat, while expanding social protection -- BERNAMA
