He said despite the strong gross domestic product growth of 5.0% in the first quarter of 2022, which was above expectations, inflation remained comparatively low.

“We have increased subsidies for petrol, some of the food items, goods and certain essential goods.

“This has helped keep inflation quite low. The inflation rate in Malaysia last month was 2.2%, so that’s still good.

“What we need to focus on now is to be more targeted with subsidies. I don’t think we can have a subsidy that’s meant for all. But the vulnerable groups still need our help,” he said in an interview with CNBC today.

The interview was held in conjunction with his attendance at the World Economic Forum annual meeting in Davos, Switzerland, from May 22-26.

Tengku Zafrul said Malaysia’s unemployment rate, which peaked at 5.3% in May 2020, had come down to 4.1% last month.

He said Malaysia faced various challenges within the region, including geopolitics, that affected the supply chain.

Another challenge was the Covid-19 lockdowns imposed by China, Malaysia’s biggest trading partner.

“However, Malaysia is a net exporter of commodities and this will enable us to absorb some of the impact,” Tengku Zafrul added.