KUALA LUMPUR – Malaysia’s Prime Minister Anwar Ibrahim on July 23 announced new measures to address growing public disquiet about the rising cost of living, including a cash handout for all adult citizens and a promise to lower fuel prices.

He said, in celebration of Merdeka Day on Aug 31, all Malaysians aged 18 and above will each receive a one-off payment of RM100 (S$30) through their MyKad under the Sumbangan Asas Rahmah (Sara) programme.

Datuk Seri Anwar said this assistance will be available for use from Aug 31 until Dec 31 and can be spent on essential goods at more than 4,100 stores across Malaysia.

Participating retailers include major supermarkets such as Mydin, Lotus’s, Econsave and 99 Speedmart, as well as retail shops in every district across the country.

“The assistance is provided on an individual basis, not by the household. It means, for example, a household consisting of a husband, wife and two adult children will receive a total of RM400,” Mr Anwar said.

“This initiative is set to benefit 22 million Malaysians, with an allocation of RM2 billion,” he said.

“This means the combined allocation for STR (Rahmah Cash Contribution) and Sara will increase from RM13 billion to RM15 billion for 2025, marking the first time in history that cash assistance is being distributed to all adult citizens,” he added.

“Some among us may have the means and do not need this assistance, and the government intends for any unused funds by year-end to be redistributed to vulnerable groups (in 2026),” he said.

The announcement came ahead of a planned protest to be held in Kuala Lumpur on July 26, calling for Mr Anwar to step down over escalating prices and a failure to deliver on promised reforms, among other concerns.

Mr Anwar has carried out a number of measures to boost revenue and productivity in 2025, including a minimum wage hike,

on heavy power users, and

He has said the moves were mainly targeted at large businesses and the wealthy, but critics have voiced fears that higher costs would eventually be passed down to consumers, including lower and middle income earners.

The police have said they expect between 10,000 and 15,000 people to attend the July 26 protest, which has been organised by opposition parties.

“I acknowledge the complaints and accept that the cost of living remains a challenge that must be addressed, even though we have announced various measures thus far,” Mr Anwar said, adding that more initiatives to aid those in poverty will be launched on July 24.

Fuel subsidies and long holiday

He said the government will also announce details of a long-awaited plan to adjust blanket subsidies on the widely used RON95 transport fuel before the end of September.

Once the subsidy changes are implemented, Malaysians will see fuel prices at the pump drop to RM1.99 per litre, compared with the current price of RM2.05, Mr Anwar said.

Foreign nationals, however, will have to pay unsubsidised market prices for the fuel, he said.

Mr Anwar did not provide details on how the measure will be enforced.

Analysts say changes to the fuel subsidy rationalisation scheme, originally set for mid-2025 and aimed at also removing subsidies for the wealthy, could affect Malaysia’s fiscal consolidation plans.

Kenanga Investment Bank economist Muhammad Saifuddin Sapuan said the cash handout and subsidy measures were necessary to boost domestic demand, amid external headwinds arising from

.

“Nevertheless, this comes at a cost, especially on how the government will finance it, and likely put pressure on its fiscal target,” he said.

Ms Kathleen Chen, of Fitch Ratings’ Sovereigns team, said further delays or insufficient progress on subsidy rationalisation could jeopardise the government’s goal to reduce its deficit to 3 per cent by 2028.

Fitch expects Malaysia’s general government debt to remain high, at around 76.5 per cent of gross domestic product in 2025, with only a gradual decline in the medium term, she said.

Mr Anwar also announced in his televised address that Sept 15 would be a public holiday to allow Malaysians to enjoy a long weekend from Sept 13, a Saturday, till Malaysia Day on Sept 16.

“This public holiday is to appreciate the unity and significance of Malaysia’s formation,” he said. “This will also encourage people to strengthen family bonds by visiting their hometowns or vacationing locally,” he said. THE STAR/ASIA NEWS NETWORK, REUTERS