KUALA LUMPUR, Sept 3 (Bernama) -- The government's move in reducing the RON95 petrol and diesel subsidy is on the right track in improving its fiscal position, said CIMB Group Managing Director and Chief Executive Officer Datuk Seri Nazir Razak.
"I think it is right, we need to reduce subsidies and widen our tax base, but we must do it in a way that does not affect the general public.
"In the context of what is happening globally, this is something very important that we need to do," he told reporters at the Khazanah Nasional open house here Tuesday.
He said following the negative outlook on the country by Fitch Ratings recently, there was a very real outflow of money from the region, and to mitigate this pressure, it was imperative to take control of both government fiscal deficit and a potential trade deficit.
Nazir said when there is an outflow of money, investors would evaluate and compare different countries, and their decision would be based on the fundamentals of each country.
"This is why it is important for the government to send out the right messages in terms of the country's fundamentals," he said.
He said across the region, every country is having to take measures to protect itself in the face of this new pressure.
"There is a lot of cheap money out there, and investors are constantly looking for an opportunity, so it is okay to be a little bit aggressive," he said.
Asked on the impact of the subsidy reduction on the general public, Nazir said the government has stated that the subsidy withdrawal would be used for specific programmes to cushion the impact on the lower- to middle-income groups.
"We look forward to these measures that the Prime Minister Datuk Seri Najib Tun Razak is going to announce in the tabling of the Budget 2014 on Oct 25," he added.
Meanwhile, the government's move to reduce fuel subsidies has received positive reviews from foreign investors as the ringgit hit a three-week high today.
The ringgit advanced 0.29 per cent to 3.2645 against the US dollar, after hitting 3.2590, its strongest since Aug 13.
-- BERNAMA
"I think it is right, we need to reduce subsidies and widen our tax base, but we must do it in a way that does not affect the general public.
"In the context of what is happening globally, this is something very important that we need to do," he told reporters at the Khazanah Nasional open house here Tuesday.
He said following the negative outlook on the country by Fitch Ratings recently, there was a very real outflow of money from the region, and to mitigate this pressure, it was imperative to take control of both government fiscal deficit and a potential trade deficit.
Nazir said when there is an outflow of money, investors would evaluate and compare different countries, and their decision would be based on the fundamentals of each country.
"This is why it is important for the government to send out the right messages in terms of the country's fundamentals," he said.
He said across the region, every country is having to take measures to protect itself in the face of this new pressure.
"There is a lot of cheap money out there, and investors are constantly looking for an opportunity, so it is okay to be a little bit aggressive," he said.
Asked on the impact of the subsidy reduction on the general public, Nazir said the government has stated that the subsidy withdrawal would be used for specific programmes to cushion the impact on the lower- to middle-income groups.
"We look forward to these measures that the Prime Minister Datuk Seri Najib Tun Razak is going to announce in the tabling of the Budget 2014 on Oct 25," he added.
Meanwhile, the government's move to reduce fuel subsidies has received positive reviews from foreign investors as the ringgit hit a three-week high today.
The ringgit advanced 0.29 per cent to 3.2645 against the US dollar, after hitting 3.2590, its strongest since Aug 13.
-- BERNAMA
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