Inflation & Prices
Asia’s Fuel Subsidies Are Falling Victim to Budget Pressures
- Thailand, Malaysia lift diesel price caps amid budget strain
- Higher prices could keep central banks on extended rate pause
Fuel pumps in Bangkok.
Photographer: Andre Malerba/BloombergThis article is for subscribers only.
Budget pressures are forcing governments across Southeast Asia to rethink fuel subsidies, risking political backlash and another inflation blow to their economies.
Thailand and Malaysia have let diesel prices climb in the past weeks to ease the burden on public finances as global crude prices rise. Even Indonesia is considering to rationalize fuel subsidies to free up money for new stimulus programs. Most have been met with resistance from citizens wary this could push up prices of basic necessities, from transport to food.