Malaysians Brace for Austerity as Najib Cools Spending: Economy

Malaysian Prime Minister Najib Razak returned to power this year with the help of a spending spree that boosted consumption. Now voters could feel the pinch as he tries to appease a different group: rating companies.

Najib’s government raised subsidized fuel prices for the first time since 2010 this month and has said it will delay some infrastructure projects, seeking to contain the budget gap and shore up the current account after Fitch Ratings cut Malaysia’s credit outlook to negative in July. It is also considering a goods and services tax in the 2014 fiscal plan due Oct. 25.