Soaring oil prices caused by the war in Ukraine could improve Malaysia’s balance sheet, according to its finance minister, providing a respite for the south-east Asian nation as it tries to recover from the 1MDB scandal and the pandemic.
Zafrul Aziz said that although the Ukraine conflict would have a “very marginal” negative impact on Malaysia’s economy, he still expected to reduce the oil-producing country’s deficit and improve its fiscal position as commodity prices multiply.
“The increase in commodity prices . . . will actually help Malaysia,” said Zafrul, a former banker who joined the Malaysian administration in 2020. “We assume an oil price around $66 per barrel in our budget. But obviously today’s is much higher than that, so then there’s a potential upside in terms of our fiscal position.”