As the 15th General Election (GE15) looms, the tabling of Budget 2023 on 7 October will be closely watched and monitored by all. In view of current political dynamics and impending election, economists largely expect the Budget 2023 to be people-friendly in the form of prioritising the issue of rising cost of living, especially when headline inflation has started to trend higher. The debate on the re-introduction of goods and services tax (GST) was reignited when Prime Minister Ismail Sabri said the government is studying the possibility of reintroducing the tax as part of the major fiscal reforms to strengthen the country’s collection capacity, despite the negative perception surrounding the GST. Should the GST make a comeback in Budget 2023?”
Coping with high interest rate environment
Amid the aggressive rate hikes by Fed, global central banks are racing to increase their rates including Bank Negara Malaysia.
While banks benefit from the rate hikes, the prospect is less rosy for businesses, consumers, and households. Businesses would face rising costs of doing business due to the cost-push effect. When businesses pass on the cost to consumers, households are left with lesser disposable income.