(Kuala Lumpur, 5th) In response to the retaliatory tariffs imposed by the United States starting April 2, which have impacted the Malaysian economy, Bagan MP Lim Guan Eng proposed five fiscal and financial measures to help SMEs and the overall economy deal with the challenges.
He emphasized that the nation needs to take decisive actions to stabilize the economy and safeguard the people's welfare.
Lim Guan Eng stated in a special parliamentary session on Monday that the U.S. president, under the guise of "Liberation Day," has imposed retaliatory (reciprocal) tariffs of up to 24% globally, leading to global economic turbulence and capital market setbacks. He criticized the tariffs imposed on Malaysia by the U.S. as "extremely unfair," as the actual reciprocal tax rate should only be 5.6%.
"Malaysia’s GDP growth forecast for 2025 was initially between 4.5% and 5.5%, but has now been downgraded by the International Monetary Fund (IMF) to 4.1%, with the World Bank lowering it further to 3.9%. Some private economic analysts even predict it might fall to 2.1%."
Although inflation has eased, with the inflation rate falling to 1.4% in March, Lim Guan Eng reminded that the cost of living remains high, especially with significant price increases in essential goods.
To address the current situation, he suggested the government adopt the following five measures:
1. Freeze measures that increase corporate costs: including canceling the 14.2% electricity rate hike, postponing the implementation of the e-invoice system, reviewing the RON95 gasoline price floating mechanism, and retracting the proposal requiring employers to contribute 2% EPF for foreign workers. He also welcomed the Ministry of Finance's decision to temporarily defer the expansion of the Sales and Services Tax (SST).
2. Lower Bank Negara's interest rates: Suggest reducing the Overnight Policy Rate (OPR) from 3% to 2% to stimulate economic growth in response to the impending economic slowdown.
3. Introduce economic stimulus packages: Advocate for government-banking sector collaboration to provide financial support to affected industries, including offering low-interest loans and flexible repayment mechanisms to help unemployed workers re-enter the workforce.
4. Protect and expand local business markets: Propose mandating that at least 50% of purchases by foreign and local investors be of local products and preventing the dumping of cheap foreign goods to protect SMEs' market share.
5. Increase development expenditure and strengthen the service industry: Urge the government to invest in the construction of logistics facilities such as ports and airports to drive the development of financial and logistics services and reduce the service deficit between Malaysia and other countries, especially Singapore.
Lim Guan Eng emphasized that SMEs contribute 39% of Malaysia’s GDP, and without adequate support, this proportion could fall to 35%, having a long-term impact on the national economy.
He called on all parties to unite under the leadership of a united government, face external challenges together, set aside racial and religious differences, and strive for national prosperity and the people's welfare.
He emphasized that the nation needs to take decisive actions to stabilize the economy and safeguard the people's welfare.
Lim Guan Eng stated in a special parliamentary session on Monday that the U.S. president, under the guise of "Liberation Day," has imposed retaliatory (reciprocal) tariffs of up to 24% globally, leading to global economic turbulence and capital market setbacks. He criticized the tariffs imposed on Malaysia by the U.S. as "extremely unfair," as the actual reciprocal tax rate should only be 5.6%.
"Malaysia’s GDP growth forecast for 2025 was initially between 4.5% and 5.5%, but has now been downgraded by the International Monetary Fund (IMF) to 4.1%, with the World Bank lowering it further to 3.9%. Some private economic analysts even predict it might fall to 2.1%."
Although inflation has eased, with the inflation rate falling to 1.4% in March, Lim Guan Eng reminded that the cost of living remains high, especially with significant price increases in essential goods.
To address the current situation, he suggested the government adopt the following five measures:
1. Freeze measures that increase corporate costs: including canceling the 14.2% electricity rate hike, postponing the implementation of the e-invoice system, reviewing the RON95 gasoline price floating mechanism, and retracting the proposal requiring employers to contribute 2% EPF for foreign workers. He also welcomed the Ministry of Finance's decision to temporarily defer the expansion of the Sales and Services Tax (SST).
2. Lower Bank Negara's interest rates: Suggest reducing the Overnight Policy Rate (OPR) from 3% to 2% to stimulate economic growth in response to the impending economic slowdown.
3. Introduce economic stimulus packages: Advocate for government-banking sector collaboration to provide financial support to affected industries, including offering low-interest loans and flexible repayment mechanisms to help unemployed workers re-enter the workforce.
4. Protect and expand local business markets: Propose mandating that at least 50% of purchases by foreign and local investors be of local products and preventing the dumping of cheap foreign goods to protect SMEs' market share.
5. Increase development expenditure and strengthen the service industry: Urge the government to invest in the construction of logistics facilities such as ports and airports to drive the development of financial and logistics services and reduce the service deficit between Malaysia and other countries, especially Singapore.
Lim Guan Eng emphasized that SMEs contribute 39% of Malaysia’s GDP, and without adequate support, this proportion could fall to 35%, having a long-term impact on the national economy.
He called on all parties to unite under the leadership of a united government, face external challenges together, set aside racial and religious differences, and strive for national prosperity and the people's welfare.