Ismail Sabri downplays early polls, cites inflation risk: Nikkei report

• Prime Minister Ismail Sabri Yaakob has downplayed calls for an early election, citing a rise in food prices and other living costs, Nikkei reported on 31 May 22.
• An election is not due until 2023 but Ismail Sabri has been facing pressure from some in his party to call an early vote to capitalise on Umno’s resurgent popularity in recent state polls.
• The prime minister told Nikkei in an interview that he will wait for “the right time” to call an election, given inflationary pressures partly stemming from the Ukraine conflict.
• “We are now facing a period of increasing inflation with high prices… do you think this is the right time?” he was quoted as saying.
• He also stressed that he is a “party person” and that he would have to adhere to the decision of UMNO as well as the cabinet. Under the constitution, the cabinet must approve a decision to advise the king to dissolve parliament.
• Bank Negara Malaysia expects headline inflation to average between 2.2% and 3.2% in 2022, with food costs up 4.1% in Apr 22. Earlier in May 22, the central bank unexpectedly raised its key interest rate to cool inflationary pressures.
• The government has introduced price control measures, but the cost of subsidies has weighed on its coffers. Ismail Sabri told Nikkei the government was keen on re-introducing a Goods and Services Tax (GST).
• An Umno government introduced the GST in 2015, but it was scrapped three years later by Dr Mahathir Mohamad’s administration, after voters blamed the 6% consumption tax for rising costs.
• Ismail Sabri said the government was aware of the GST’s unpopularity, but had limited options, noting it had lost MYR20bn in annual revenue after the tax was abolished.
• The government will target a GST rate that would not burden the people, but was not so low that it “defeats the purpose of expanding tax revenue”, he told Nikkei.

External Link : https://asia.nikkei.com/Editor-s-Picks/Interview/Malaysia-s-Ismail-Sabri-resists-rush-to-election-as-inflation-bites

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