Anwar's immediate policy is to tackle rising cost of living

24 Nov 2022 06:20pm
Prime Minister Datuk Seri Anwar will lead a unity government.
Prime Minister Datuk Seri Anwar will lead a unity government.

SHAH ALAM - Datuk Seri Anwar Ibrahim's immediate focus is to tackle the rising cost of living and bring down inflation.

Economists say Anwar's appointment as the country's 10th prime minister bodes well among investors and will propel the country to new heights.

AIMST University vice chancellor Datuk Dr John Antony Xavier said Anwar's immediate policy is to reduce the cost of living by bringing down the inflation rate.

"Once inflation rate stabilises and starts to decline, the benchmark interest rate too will remain steady.

And that will be good to stimulate domestic investments and production expansion through lower cost of production.

Xavier said Anwar will also look to promoting economic growth by promoting trade and improving competitiveness.

"Through targeted subsidies he will be able to address the plight of the poor while not overstretching the government coffers," Xavier told Sinar Daily.

Xavier added Anwar will bring certainty to the government and economy.

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"Being internationally known and well-received globally he will be able to attract international goodwill and foreign direct investments in greater value and numbers.

That will boost economic growth and employment while expanding production that will gradually put the brakes on inflation.

Xavier added certainty in government and the feel good factor will contribute confidence in the economy and will arrest the slide in the value of the ringgit, and will not cause it to appreciate further.

"This will also help dampen import prices of intermediate goods and raw materials that compirse 60 percent of the final manufacture.

Stock market rebounds

Economists said the stock market is bouncing back which is indicative that good times will roll and the comfidence in the economy is on the ascendant.

Meanwhile Associate Professor Dr Ahmed Razman Abdul Latiff said the investors will appreciate the certainty and stability coming from Anwar's appointment and this augurs well with the economic prospect for this year and beyond.

Will the ringgit surge?

The immediate reaction to Anwar's appointment is that the ringgit will strengthen from it current position of RM4.50.

"Nevertheless, the ringgit will probably be still subjected to external factors rather than because of this appointment," said Razman who is senior lecturer at Universiti Putera Malaysia's business school.

"His immediate economic policies is to speed up the presentation and approval of Budget 2023 by next month," Ahmed Razman told Sinar Daily.

Anwar needs to tweak Budget 2023

Economists say even though Budget 2023 has been tabled, it still needs to be approved.

"Anwar needs to embed his own manifesto into the budget and so this will probably take some time prepare before it can be presented as the revised budget.

"Maybe he will adopt the same strategy in 1999, where the government at that time presented a mini budget first, starting with a mini budget for the first 6 months while preparing a more solid one for the remaining 6 months.

Anwar well-known internationally

Without a doubt, Anwar's rise will solve the uncertainty and settle the markets.

"Anwar is well known internationally and well respected as a leader.

"It will have a good impact on investor sentiment and the ringgit has immediately strengthened," said Professor Geoffrey Williams.

The economics senior lecturer at the Management, Science and Technology University said Anwar's immediate challenge is to make a credible budget focused in protecting growth for next year and keeping inflation low.

"He also needs to begin the reform agenda focused on social and economic reforms.

"This include reform on pensions, social protection, reducing cartels and improving competitiveness, promoting private investment and helping small and medium scale-enterprises or SMEs..

Nipping corruption in the bud

The country has underwent so much corruption trials in the past that something has to be done to nip this scourge.

"Anwar must be tough on corruption and strengthen the institutions as he has promised that will increase the nation’s competitiveness and Malaysia will be able to export more which will enhance economic growth, employment and prosperity.

Thus minimising corruption must be at the top of his agenda.