Malaysian Prime Minister Anwar Ibrahim has announced a series of measures aimed at easing the rising cost of living while strengthening support for local businesses and public services. The measures were outlined during a televised address on Sunday, 30th August, and are due to take effect from 1st September.
“The economic growth of the country must be returned to the people,” Ibrahim said.
The prime minister has faced sustained pressure to address rising living costs, despite Malaysia’s economy outperforming most of its regional peers. Gross domestic product grew by 6% in the second quarter of this year, exceeding official projections.
Central to the package is the restoration of higher quotas for subsidised fuel. The government will increase the monthly quota for Malaysian citizens buying RON95 petrol to 300 litres, up from 200 litres after an earlier reduction this year. The cut followed a surge in global crude oil prices linked to the US-Israel war on Iran.
The monthly quota for diesel purchases by certain categories of users will also rise to 400 litres. Subsidised RON95 will remain priced at 1.99 ringgit per litre under the programme.
More than 16 million people are expected to benefit from the restored RON95 quota, while more than 500,000 owners of eligible diesel vehicles, including pick-ups and four-wheel-drive vehicles, will benefit from the higher allocation.
The fuel adjustments form part of six immediate measures covering subsidies, education, technology access, healthcare, invoicing rules, and small business finance. Ibrahim said the measures were needed immediately rather than waiting for the full Budget 2027 presentation in October, as cost-of-living pressures and business needs could not be delayed.
A government artificial intelligence programme will also be opened to Malaysians aged between 18 and 30. Participants will receive free access to several key applications, including Google’s Gemini Enterprise and Alibaba Cloud’s Wonderclip and MuleRun.
The school maintenance allocation will increase by 50% to 1.5 billion ringgit, covering national schools, Chinese and Tamil vernacular schools, religious schools, and special education facilities.
Microfinance facilities for small traders will receive an additional 1 billion ringgit, bringing total available funding to 6 billion ringgit. A separate 200 million ringgit grant scheme under the Geran Sejahtera Madani programme will support hawkers, small traders, night market vendors, and mothers working from home.
The government will also raise the annual revenue threshold below which companies are exempt from implementing e-invoicing to 3 million ringgit. Additional funding will support improvements to digital health systems.
Any funds seized or forfeited through anti-corruption legal proceedings will be channelled into government programmes, particularly those focused on education and healthcare.
Ibrahim’s coalition has faced declining support amid criticism over its failure to deliver promised reforms and its handling of several high-profile corruption cases. The coalition has been defeated in three successive regional elections in recent months. These state elections are widely viewed as an indicator of voter sentiment ahead of a general election that must be held by early 2028. Ibrahim has said he could call snap polls if divisions within his administration continue to widen.
The measures were announced on the eve of Malaysia’s National Day. Ibrahim acknowledged that, despite steps already taken, many citizens continued to struggle with the cost of everyday essentials.
The package is intended to provide temporary relief for schoolchildren, young people, housewives, mothers, and small traders while Malaysia’s wider economy continues to expand.
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