Malaysia unveils Singapore-style aid to help poor beat inflation

MALAYSIA announced plans to provide direct aid to low-income households, mimicking steps taken by neighbour Singapore to reduce the hit from surging inflation on the most vulnerable groups.

Cash assistance of up to RM100 (S$31.5) will be given to eligible recipients, bringing the total handout provided so far to RM500 each, Prime Minister Ismail Sabri Yaakob said in a televised address on Wednesday (Jun 22). This round of assistance will cost the government RM630 million and will be disbursed starting on Monday, he said.

The measure seeks to address concerns about inflation and its impact on citizens, especially those under the so-called bottom 40 per cent of population comprising lower-income earners. On Tuesday, Singapore announced a S$1.5 billion (US$1.1 billion) package aimed at providing relief to poorer households and local businesses from price pressures.

"Taking into account the challenges of the cost of living and the recent rise in food prices, the government decided to provide additional cash assistance," Ismail said. "This payment will benefit nearly 8.6 million recipients including four million households, 1.2 million seniors and 3.4 million singles."

Malaysia, a net food importer, is struggling to keep inflation in check with its currency weakening amid US dollar strength. Food inflation rate hit the highest since 2017 as of May, prompting the government to take several measures to secure local supplies and lower costs.

The nation banned chicken exports to improve domestic supplies, while price caps announced on the staple food are due to end this month. The government in 2021 provided cash aid amounting to 1.1 billion ringgit to the lower-income group. BLOOMBERG