Malaysia will suffer an 'economic emergency' - PAS

Malaysia will suffer an “economic emergency” next year following the fall in global oil prices and the depreciation of the national currency.

Pas information chief, Datuk Mahfuz Omar said, the party also expects the national inflation to rise dramatically due to those two factors.

Pas, he said, is not convinced the government will be able to manage the drop in revenue with income from the Goods and Services Tax (GST).

“Recently Petronas announced their contribution to national revenue will decrease as much as RM25 billion.

“This is a large sum. Many projects will have to be halted when Petronas is forced to decrease their contributions as much as RM25 billion.

“In this scenario, the people will be more prudent in their spending, which means they (the rakyat) will not spend. Therefore if there is not expenditure, how will revenue from the GST be obtained?” he said during a press conference at the party’s headquarters on Wednesday.

On Monday, the Malaysian ringgit posted its biggest two-day decline since the 1997-98 Asian financial crisis.

According to data compiled by Bloomberg, the currency weakened 1.5 percent to 3.4340 per dollar in Kuala Lumpur.

Brent crude meanwhile, slide to a five-year low, trading at $70 a barrel, after OPEC’s decision last week not to cut production to shore up prices.