Targeted Diesel Subsidy Rationalisation Not Main Driver Of Rising Manufacturing Costs - MOF

KUALA LUMPUR, Nov 26 (Bernama) -- The Ministry of Finance (MoF) has emphasised that the targeted rationalisation of diesel subsidies starting in June 2024 is not the main cause of the rise in costs of goods in the manufacturing sector, which led to the decline in the Purchasing Managers’ Index (PMI) in July 2024.

In a written response posted on the Parliament website, the ministry stated that the minimal decline recorded from 49.9 points in June 2024 to 49.7 points in July 2024 could be attributed to various economic risks. 

These include factors such as weaker external demand, reduced purchasing and inventory activities by firms, and supply chain disruptions.

“Based on the manufacturing PMI records for Malaysia in 2023 and 2024, the monthly PMI performance in 2024 can be considered better and more stable compared to 2023,” said the MoF in response to a question from Datuk Awang Hashim (PN-Pendang), who asked about the government’s response to the PMI falling below the neutral level.

The highest PMI reading for the manufacturing sector in 2024 was recorded at 50.2 points in May 2024 (2023: 48.8 points in March and April), while the lowest reading was 48.4 points in March 2024 (2023: 46.5 points in January), the ministry added.

Meanwhile, in response to a question from Datuk Abdul Khalib Abdullah (PN-Rompin) regarding cyber threats to the implementation of e-invoicing, the MoF stated that the Inland Revenue Board (LHDN) carries out data governance based on industry standards.

“To ensure data security, LHDN is committed to adhering to international standards through certifications such as the Information Security Management System and the Business Continuity Management System, as well as other relevant standards concerning data management and security.

“LHDN also conducts periodic Security Posture Assessments (SPA), including collaborating with the National Cyber Security Agency (NACSA) and the National Security Council (MKN) to ensure the security of the MyInvois system is at the highest level,” said the ministry.

-- BERNAMA