Malaysia cuts subsidies in surprise move

Malaysia surprisingly hiked fuel and sugar prices on Friday to reduce expensive subsidies, a controversial move that will save the government more than 230 million dollars this year alone. But the decision could have serious political repercussions for Prime Minister Najib Razak and it could spark a rise in prices of other goods and services, analysts said.
The government defended the subsidy cut, saying it was important to achieve its development goals and promote healthier lifestyles. "The government has made a difficult, but bold decision," it said in a statement. "By choosing to implement these modest subsidy reforms, we have taken a crucial step in the right direction towards meeting our commitment to reduce the fiscal deficit, without overburrdening the Malaysian people. The cuts will save 750 million ringgit, or 234.4 million dollars, this year. Malaysia will still be spending 7.82 billion ringgit from now till the end of the year on subsidies for fuel and sugar.