KUALA LUMPUR – Prime Minister Datuk Seri Anwar Ibrahim’s special announcement today signalled that the government is not solely focused on short-term relief when addressing the rising cost of living.
Bank Muamalat chief economist Mohd Afzanizam Abdul Rashid said the initiatives reflect efforts to maintain long-term fiscal stability.
He said the two main measures – a one-off RM100 cash aid for all adult citizens and a targeted fuel subsidy that will lower the price of RON95 petrol to RM1.99 per litre from September – indicate that fiscal policy is being strategically deployed to stimulate domestic demand while containing financial inefficiencies.
“This announcement shows the government is actively seeking ways to assist the public, particularly in tackling cost-of-living pressures.
“The RM100 cash aid represents a direct injection to over 20 million Malaysians, with an estimated allocation of around RM2 billion.
“It is a modest form of fiscal stimulus, sufficient to offer some breathing space to the people without placing excessive strain on the national budget,” he told Scoop today.
Afzanizam added that the aid is part of a balanced fiscal strategy – delivering targeted assistance while preserving the government’s capacity to invest in the country’s future.
“The decision to lower RON95 to RM1.99 per litre, but only for Malaysians, marks a shift toward the long-planned targeted subsidy approach.
“This method is expected to ease the government’s subsidy burden, which has long been enjoyed by non-citizens and high-income groups.
“The government remains committed to maintaining financial discipline in order to preserve fiscal space,” he said.
He noted that the announcement comes amid a loose monetary policy stance, with Bank Negara Malaysia having reduced the overnight policy rate (OPR) to 2.75%.
“The combination of fiscal (government spending) and monetary (low interest rates) policies represents a ‘twin-engine strategy’ to spur growth amid a slowing global economy.
“Both policies are being mobilised to ensure economic growth remains steady despite concerns over external factors – especially US tariff shocks and ongoing geopolitical uncertainties that may weigh on global growth,” he said.
Earlier today, Anwar announced several key measures to ease cost-of-living pressures and support Malaysians through a period of structural economic transition.
These include a one-off RM100 cash credit for all adult citizens, to be disbursed via MyKad under the Sumbangan Asas Rahmah (SARA) programme.
The credit – valid from August 31 to December 31 — can be used to purchase essential items at over 4,100 outlets nationwide. It is expected to benefit some 22 million individuals, bringing the total 2025 allocation for SARA and the Rahmah Cash Aid (STR) to RM15 billion.
RON95 petrol will be priced at RM1.99 per litre from September under the targeted subsidy scheme. The move is expected to benefit 18 million drivers and motorcyclists, including youth and gig workers.
Meanwhile, a scheduled toll rate hike for 10 highways has been deferred, saving the public over RM500 million.
Additionally, 85% of domestic users will see up to a 14% reduction in electricity bills for July-December 2025, compared to the first half of the year. – July 24, 2025