'Economy grew better than expected', PM defends reforms

The Star

20-06-2025

PUTRAJAYA: Prime Minister Datuk Seri Anwar Ibrahim has defended the government's handling of the economy, asserting that although the reforms may be challenging, they are beginning to yield real and positive results.
Speaking at the monthly gathering of Finance Ministry staff, Anwar acknowledged public concerns and online criticism that the government is not managing the economy well, overspending, or making life harder with new taxes and reduced subsidies.
"We are burdened with a tired fiscal system, weighed down by old debts and a narrow income base," he said.
"But like it or not, we must reform, even if it's tough," said Anwar on Friday (June 20).
Anwar stated that the country's economy is improving in several key areas. Malaysia has jumped 11 places to 23rd in the world in the latest global competitiveness ranking — the best score since 2020.
"The economy grew by 5.1% in 2024, better than expected. The unemployment rate is down to 3.0%, the lowest in 10 years, and the ringgit has strengthened, gaining over 5% against the US dollar this year.
"This shows the world is recognising our reforms and investors are responding positively to the direction we're taking."
He said Malaysia's financial discipline is also gaining international praise.
The International Monetary Fund (IMF) recently commended the country's efforts to control spending and debts, particularly the introduction of the Fiscal Responsibility Act 2023.
"Government spending is now more careful, with fewer new debts and a shrinking fiscal deficit, which dropped to 4.1% in 2024."
Anwar also stated that reforms are not about abandoning the people.
"Instead, help is being delivered in a more targeted and effective way, where in 2023, 85% of households were unaffected by changes to electricity subsidies.
"Diesel subsidies were adjusted in 2024 to reduce government spending without raising the cost of goods, as the logistics sector continued receiving support."
He said the expanded sales and service tax (SST) changes starting in July 2025 will not affect essential goods.
"We're not just saving money, we're using it better, for the people who truly need it."
With more efficient use of funds, the government has been able to increase support where it matters most. Anwar said a record RM13 billion in cash assistance through the STR and SARA programmes will benefit nine million Malaysians, or 60% of the adult population.
"Budgets for public services have also grown, with RM64bil allocated for education and RM45bil for healthcare in 2025. We're making sure these savings go back to the people — in the form of better aid, education, healthcare, and public transport."
Anwar said Malaysia can no longer afford to do things the old way. Reform is hard, but necessary.
"This is a journey of courage and commitment," he said. "With teamwork, understanding, and the will to do the right thing, we can carry out this trust with full responsibility."
He urged civil servants and the public to stay united, work hard, and believe in the path the country is taking.