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Free Malaysia Today
6 days ago
- Business
- Free Malaysia Today
RM100 aid plan may boost Q2 GDP, says economist
The one-off RM100 cash aid that can be redeemed at 4,100 grocery stores across the country is expected to give the economy a boost. PETALING JAYA : The government's decision to offer a one-off RM100 cash handout to all adult Malaysians has won plaudits from economists. Afzanizam Abdul Rashid, chief economist at Bank Muamalat, said it would give the economy a boost, albeit a short-term one, while Geoffrey Williams said that despite it being a small amount, it would still be meaningful for poorer families. Prime Minister Anwar Ibrahim, who announced the payout and a host of other incentives yesterday, said all Malaysians aged 18 and above would benefit from the handout. Afzanizam Abdul Rashid. Afzanizam said the payout, which is part of a wider RM15 billion aid package under the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara), would likely boost local spending and domestic demand, key pillars of the economy. 'This could give Malaysia's second quarter gross domestic product (GDP) a lift,' he told FMT. 'This will certainly help to increase consumer spending. Given the sizeable share of consumer spending (60% of GDP), it should have a material impact on the overall economy, especially domestic demand,' he added. He said the handout could act as 'fiscal pump priming' – the government spending money to boost the economy — amid global risks. '(Combined) with the 25-basis-point drop in the OPR (overnight policy rate), the move should boost GDP growth in the second half, which will benefit all citizens in this country,' he added. Afzanizam also said the lower- and middle-income groups were more likely to spend the RM100 rather than save it, given their high tendency to spend. In his announcement, Anwar said that apart from the RM100 cash aid, which would benefit 22 million adults, the pump price for RON95 would also be lowered to RM1.99 per litre for those eligible by year's end. Geoffrey Williams. Williams sees the RM100 handout as a 'potential turning point' in the country's welfare policy. 'This is a good initiative. It will serve as a pilot for reform of the STR/Sara programme to create a universal basic income (UBI), which would be a first in the world and set Malaysia as a leader in welfare reform,' he told FMT. 'It has all the features of a UBI because it is a cash transfer to individuals, not households, without conditions and available to all Malaysians without the need to apply.' Williams said that while the RM100 payout might be considered small, especially as a one-off, it was still meaningful for poorer families and single people. 'For a household with four adults it is RM400 which covers essential food costs.' He added that the move was affordable under ongoing subsidy reforms and could add up to RM6 billion in spending to the economy this year. 'This is a very good way to use RM2 billion and will add a small stimulus worth RM6 billion to consumption in the second half to support growth which is otherwise expected to be weaker,' Williams said. 'It really is a good move. Although many will be cynical about timing, he deserves credit for this move.' On the planned fuel subsidy, Williams said the drop in price from RM2.05 to RM1.99 was modest but helpful. 'The small reduction from RM2.05 to below RM2 is helpful but only marginally so. The subsidy rationalisation is not primarily intended to cut daily costs. It is mainly to reduce wasteful subsidy spending. 'It will not be expensive and will be paid for from savings derived from high-income users,' he added. Williams also said some form of subsidy was still needed to prevent low-income Malaysians from being priced out of fuel. 'We need to see the mechanism, but some form of subsidy is still necessary to prevent the poor from being excluded from access to petrol,' he said. Afzanizam also said the targeted fuel aid could help curb inflation. He added that while there is the risk of businesses raising prices, limiting the RON95 subsidy to qualified individuals would moderate the risk of inflation.
Malay Mail
19-07-2025
- Business
- Malay Mail
Ringgit to hold steady next week amid Fed watch and trade talk hopes, say analysts
KUALA LUMPUR, July 19 — The ringgit is expected to hover around RM4.24 to RM4.26 next week amid mixed signals in the market. This follows the anticipation of a potential meeting between United States (US) President Donald Trump and Chinese leader Xi Jinping, as well as the upcoming Federal Open Market Committee (FOMC) meeting by the end of the month. SPI Asset Management managing partner Stephen Innes said the market is expected to adopt a tone of cautious optimism next week, as the potential Trump-Xi meeting could reset the US-China dialogue, lifting broader Asian sentiment. 'For Malaysia, any thaw in trade tensions could brighten the macro outlook and, by extension, offer a floor to the ringgit in the near term. That diplomatic backdrop, however tentative, has helped curb more aggressive ringgit selling into the weekend,' he told Bernama. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that the next FOMC meeting will be held on July 29 and 30, and therefore, market participants will be closely watching to see whether the US Federal Reserve (Fed) will cut the Fed Fund Rate. 'Next week, there are not many data points to look at other than some comments from the Fed officials; thus, the market will be adopting a wait-and-see stance,' he added. Meanwhile, Kenanga Investment Bank Bhd said the ringgit remains supported by improving domestic fundamentals, rising foreign direct investment inflows, and infrastructure catalysts such as the resumption of the Mass Rapid Transit 3 project. 'We expect US dollar-ringgit to range between RM4.23 to RM4.25 per US dollar in the near term,' it said in a note today. On a Friday-to-Friday basis, the ringgit ended the week better against the greenback, closing at 4.2410/2455 as compared with 4.2475/2525 previously. The local note also traded higher against a basket of major currencies. The ringgit appreciated vis-à-vis the Japanese yen to 2.8517/8549 from 2.8893/8929, and strengthened against the British pound to 5.6999/7060 from 5.7524/7592 last Friday. It also rose versus the euro to 4.9336/9388 from 4.9679/9737 at the end of last week. Against Asean currencies, the ringgit traded mostly higher. The local note firmed against the Singapore dollar to 3.3027/3065 from 3.3186/3228, strengthened versus the Indonesian rupiah to 260.2/260.6 from 261.8/262.3 previously, and improved against the Philippine peso to 7.41/7.43 from 7.52/7.53 last Friday. However, it weakened versus the Thai baht to 13.3027/3065 from 13.0668/0886. — Bernama
Malay Mail
17-07-2025
- Business
- Malay Mail
Ringgit dips amid ongoing concerns over US tariffs and Fed leadership
KUALA LUMPUR, July 17 — The ringgit slipped further against the greenback on Thursday on continued uncertainty about US tariffs. At 6pm, the local note dipped to 4.2465/2510 from 4.2400/2490 on Wednesday's close. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said market participants remained anxious about how US tariffs will impact the global economy. 'US President Donald Trump has indicated that 150-plus countries will be notified about their respective tariff rates, which could be in the region of 10 to 15 per cent. At the same time, Trump also denied news on the possible termination of the current US Federal Reserve (Fed) chairman Jerome Powell. Market participants remain anxious about how the US tariffs will (play out),' he told Bernama. SPI Asset Management managing partner Stephen Innes said the markets were earlier jolted on the news regarding the fate of the Fed chairman, stirring concerns of a direct assault on the US central bank's independence. 'That sparked a knee-jerk selloff of the US dollar and a brief bid into gold, but the move quickly reversed after Trump's (denial of a plan to fire Powell),' he added. On the ringgit, Innes said that while regional currencies broadly struggled today, the sentiment on the ringgit soured further due to Malaysia's current trade standing with the United States. 'Unlike Indonesia, which recently inked a deal to reduce tariffs and deepen bilateral trade ties, Malaysia has made little visible progress on that front. That comparative stagnation is starting to bite, especially with global investors scrutinising who's in Washington's good books heading into a volatile period with the Aug 1 tariff deadline looming,' he added. At the close, the ringgit traded higher against a basket of major currencies. It was up versus the euro at 4.9217/9269 from 4.9248/9352 at yesterday's close but retreated against the British pound to 5.6886/6946 from 5.6786/6907 and declined against the Japanese yen to 2.8548/8580 from 2.8508/8569. The local note also trended mostly higher against ASEAN currencies. It inched up against the Indonesian rupiah to 259.8/260.2 from 260.3/260.9 and strengthened versus the Philippine peso to 7.41/7.43 from 7.43/7.45. The ringgit fell against the Thai baht to 13.0521/0720 from 13.0301/0630 and traded down vis-à-vis the Singapore dollar to 3.3013/3051 from 3.2999/3071.— Bernama
