KUALA LUMPUR: Malaysia has an economic contingency plan in place if the global trade war worsens, and the same plan can be adopted should the ongoing US-Iran conflict escalate, says Finance Minister Lim Guan Eng.
He said the geopolitical conflict was one of the topics discussed at the Cabinet meeting today, with greater concerns over stability and whether it will affect global economic growth.
He said the biggest challenge facing Malaysia following the conflict is to maintain the country’s economic growth.
“It is still too early to tell (the impact of this conflict) while in the meantime, the government can definitely manage (the petrol subsidy should prices spike).
“We hope both countries can come to their senses and not go to war,” he told a press conference after the Inland Revenue Board’s (LHDN) Meet the Customer Day.
Oil prices jumped significantly last night, with the global benchmark Brent crude surging 1.6% to almost US$69 per barrel, due to the US-Iran geopolitical tensions following multiple missile strikes at air bases in Iraq housing US troops.
This came after the killing of top Iranian general Qasem Soleimani in a US airstrike in Baghdad last week.
For every US$1 increase in the oil price, Petronas will get RM300 mil more, but the government would be squeezed for a higher petrol subsidy, Lim said.
“We have to pay a higher petrol subsidy, (but) so far the country can manage,” he added. – Jan 8, 2020 Bernama