KUALA LUMPUR, May 20 — Malaysians can expect food prices to go up by some eight per cent by year-end with “haphazard” subsidy cuts driving the country’s worsening inflation, Datuk Seri Anwar Ibrahim has said.The opposition leader said the “alarming” 4.9 per cent rise in food prices from January to April this year compared to the same period last year suggested that there would be a “repeat [of] the pain of 2008”, when food prices jumped 8.8 per cent following sudden fuel price hikes.
“If this pattern persists for the remainder of the year, 2011 will register the second-highest food price increase for the people to bear since 2006,” Anwar (picture) said in a statement today.
This would mean food prices have increased by 30 per cent since 2005 while average wages have only gone up 2.6 per cent during the same period, he pointed out.
The former finance minister said that there was a “direct correlation” between the government’s subsidy cuts and the persistent food price increases registered so far this year.
Anwar also slammed Barisan Nasional (BN) for offloading the financial burden of the country’s economic mismanagement to the people while tycoons and cronies who benefited most from government largesse over the past decade went “unpunished”.
He stressed that the moral and social justification for making the public bear the cost of poor governance was weak when the excesses and wastages that led to Malaysia’s growing budget deficit were left untouched.
“A vote for Barisan Nasional is a vote for economic mismanagement and escalating food prices,” he said.
The PKR de facto leader reiterated that the opposition has already outlined clear steps to reduce the budget deficit without burdening the people in its Orange Book manifesto.
He said this included the removal of RM19 billion in corporate subsidies to “elite and well-connected companies” like independent power producers (IPPs) and clamping down on corruption to stem an estimated RM28 billion in leakages suffered by the government each year, highlighted in the 2008 Auditor-General’s Report.
Bank Negara said today that inflation this year would fall within its initial forecast of 2.5 to 3.5 per cent despite increasing inflationary pressure.
“We have already made a projection between 2.5 per cent and 3.5 per cent and our expectation is that it will be closer at the higher end of the projection,” Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said.
The Najib administration has embarked on its latest round of subsidy rationalisation to slash ballooning petroleum subsidies despite inflation hitting a two-year high of 3.2 per cent last month.
Prime Minister Datuk Seri Najib Razak earlier this week reaffirmed his commitment to the gradual removal of subsidies — which he said was “like opium” — to help bring Malaysia’s budget deficit under control.
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