Eleven of the 20 economists surveyed by Bloomberg expect Bank Negara Malaysia (BNM) to stand pat for a third straight meeting, while the remaining see the Overnight Policy Rate (OPR) lifted by 25 basis points to 3%.

The mixed views reflect the central bank’s quandary under the new government.

Malaysia’s growth slumped in the last quarter and is set to moderate in 2023.

At the same time, price pressures — already elevated — could spike due to Prime Minister Anwar Ibrahim’s plans to reduce subsidies to check the government’s ballooning debt.

To be sure, the government’s stance on price controls remains cautious, and a date hasn’t been set yet on removing fuel subsidies for the rich — a move that the finance ministry said could save the administration up to RM17 billion.

Without “major surprises on domestic growth or inflation,” BNM is unlikely to hike rates today after such a brief pause, Maybank Securities economists Winson Phoon and Se Tho Mun Yi said.

Analysts at RHB Bank see things differently. BNM has three main reasons to hike by a quarter basis point today, according to Chin Yee Sian and Wong Xian Yong.

The three reasons are: elevated core inflation, the nominal effective exchange rate’s downward trajectory, and rising risks the government will announce targeted fuel subsidies and new taxes, they said.

What’s clearer is that Malaysia still has scope to hike rates this year, if the rate is not increased today.

Anwar last month expressed confidence that gross domestic product (GDP) will exceed the revised official forecast of 4.5%, driven by measures in the 2023 budget and renewed confidence among international investors.

The government recently announced investment from Tesla Inc and Amazon Web Services, which is set to create jobs and further lift Malaysia’s outlook.