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Soh Lian Seng, head of tax at KPMG in Malaysia, however, points out that in some markets the subsidies are actually decreasing as governments become aware of not busting their budget deficits too much.

AT first, governments around the world had sought to fight off the effects of the Covid-19 pandemic by throwing a lifeline to those mostly affected such as the lower-income groups. But then came a bigger challenge –rising inflation, putting an already stressed populace in a difficult position to afford necessities. So more money is being spent on subsidies.

From Singapore to Thailand, the United Kingdom to the United States, there is some form of help being given to the public to help them face rising inflation. But at what expense?

Soh Lian Seng, head of tax at KPMG in Malaysia, however, points out that in some markets the subsidies are actually decreasing as governments become aware of not busting their budget deficits too much.

“Although subsidies had reached high levels during the pandemic and governments continue to focus on areas most impacted, generally, Asean and India are seeing a decline in subsidies as the world moves towards the endemic phase in the new normal,” he tells StarBizWeek.

In particular, he notes that Covid-19 healthcare and social assistance in Indonesia and Singapore as well as food, fertiliser and petroleum in India are being progressively scaled back and estimated to further decline in the foreseeable future.

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subsidies others

On the other hand, the national budget for subsidy in Thailand is forecast to remain relatively unchanged since the pandemic, where the subsidy budget is expected to account for the largest proportion.

AmBank Group chief economist Anthony Dass says that government spending on subsidies globally in 2020 saw a sharp jump to 47.3% of total expenditure, from 43.7% in the previous year.

“For instance, the US government expenditure on subsidies and other transfers rose 55.5% year-on-year to US$4.9 trillion (RM21.7 trillion), while in the UK it climbed about one-third in 2020,” Dass shares.

The assistance programme given out by governments to cushion the adverse impact of Covid-19, among others included wage subsidies, financial aid for reskill-upscaling, utilities credit and cash transfers.

More recently, food security woes have been making world headlines and subsidies have been leaning towards catering for and expanding programmes on domestic farming.

“The move can be seen in the European Union with aid raised to maintain domestic production by reaching out to their hardest-hit farmers, as well as the Czech Republic that introduced a bill that requires at least 85% of food to be domestically produced by 2027,” says KPMG’s Soh.

ag区块链百家乐声明:该文看法仅代表作者自己,与本平台无关。转载请注明:胜负彩开奖(www.99cx.vip):How other countries are subsidising their way out of inflation
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