KUALA LUMPUR (June 25): Prime Minister Datuk Seri Anwar Ibrahim highlighted that the failure to implement targeted subsidies is among the reasons that led to Malaysia's decline in the IMD’s World Competitiveness Rankings 2024.

Noting that the IMD’s World Competitiveness Ranking 2024 takes into consideration government expenditure in 2023, Anwar acknowledged that government spending has increased amidst a growing national deficit.

"Yes, we approved additional allocations for social assistance such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA), which I deemed necessary in consideration of public interests. However, another significant criticism in the report is our failure to implement targeted subsidies," Anwar told the Dewan Rakyat during the Prime Minister’s Question Time.

Anwar, who also serves as the Finance Minister, explained that the absence of targeted subsidies had not impacted Malaysia's ranking in previous years, as this criterion was only included in the indicators last year.

"This is why Indonesia, which took drastic measures by implementing targeted subsidies and adjusting prices for flour and sugar, saw a notable increase in their ranking," he noted.

Anwar added that other reasons contributing to Malaysia's decline in competitiveness include a weakened ringgit and several key performance indicators compared to the period post-pandemic in 2022.

Nevertheless, Anwar expressed confidence in Malaysia's future prospects, anticipating improvements in rankings with the strengthening of the ringgit, economic growth, and ongoing reforms such as the recent implementation of diesel subsidy reforms.

"I am confident that our ranking will improve, and the government is taking note of the three factors highlighted in the report to address them," Anwar said.