How does the 2023 subsidy allocation compare to the actual 2022 expenditure?

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2023 Subsidy Allocation Significantly Exceeds 2022 Actual Expenditure

The total subsidy allocated for the people under Budget 2023 amounts to RM55 billion. This figure represents a substantial increase when compared to the actual subsidy expenditure in 2022, which reached RM77.7 billion. The 2023 allocation is based on projections of declining global commodity prices.
2023 Subsidy Allocation Projections

For Budget 2023, the government has allocated RM55 billion for subsidies. This estimate is predicated on the expectation that crude oil prices will moderate to approximately US$90 per barrel and that other commodity prices will also decline. These projections are linked to an anticipated global economic slowdown in the coming year.
2022 Subsidy Expenditure Surpassed Allocation

In contrast to the 2023 projections, the subsidy expenditure in 2022 significantly exceeded its allocated amount. While the initial allocation for 2022 was RM31 billion, the actual spending climbed to RM77.7 billion. This overspending was primarily driven by inflationary pressures stemming from global supply chain disruptions.
Factors Driving Increased 2022 Expenditure

The surge in actual subsidy expenditure in 2022 was largely attributed to sharp increases in global commodity prices. For instance, oil prices escalated to US$120 per barrel, leading to higher subsidy payouts for RON95 fuel. Similarly, elevated coal prices necessitated increased subsidies for electricity generation.
Increased Support for Lower and Middle-Income Groups

Budget 2023 also includes enhanced support for lower and middle-income groups through increased social aid and subsidies. Allocations for these categories have been effectively doubled, now comprising 11.3 per cent of operating expenditure, up from 5.2 per cent. Specifically, cash aid for the B40 income group is estimated to be around RM10 billion.

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How does the 2023 subsidy allocation compare to the actual 2022 expenditure?

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