Malaysia

Finance Minister Nor Mohamed Yakcop has said that Malaysia remains confident of meeting its 2008 budget deficit target of 3.1% of GDP, despite soaring global oil prices placing an increasing fiscal strain on the government as it continues to heavily subsidise domestic fuel prices. Fuel subsidies cost the state MYR40bn (US$12.44bn) in 2007, and this figure is unlikely to witness any significant decline in 2008 as oil prices remain elevated. Fuel subsidies may be adjusted once elections on March 8 have passed, but with Prime Minister Abdullah Ahmad Badawi under increasing pressure, there is still no guarantee that this will be the case.

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