Malaysia has the capacity to gradually cut its subsidy bill for 2013 so as not to affect businesses and consumers, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz.
She said a gradual reduction will allow businesses to adjust by other means to cut cost to enable them from passing the cost to consumers.
"Malaysia has the prospect of rationalising and streamlining the subsidy in a gradual manner so that industry and consumers are aware of the direction it is going," she said.
Businesses, would then be given time and space to manage their operations more efficiently to raise their productivity level and mitigate the increase in prices to end users.
Zeti said this yesterday in response to a reporter's question if the subsidy cut planned for 2013 will have an impact the country's inflation rate.
It was reported that the subsidy bill, which is used to cap prices of essential goods including fuel, sugar and cooking oil is to decline to RM37.6 billion in 2013 from RM42.4 billion in 2012.