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FORMER finance minister Lim Guan Eng has urged the government to implement immediate financial relief for micro, small, and medium enterprises (MSMEs) struggling with rising operational costs driven by geopolitical tensions in the Middle East.
In a statement issued today, Lim warned that escalating logistics expenses, volatile raw material prices, and supply chain instability, compounded by concerns over oil price spikes, threaten the survival of Malaysian businesses.
“The time is now for the Malaysian government to act immediately to implement financial relief policies for Malaysian businesses, especially micro, small and medium enterprises (MSMEs), to save them from a crisis of survival impacted by the escalating costs of the Middle-East war,” he said.
Lim further highlighted the risk of oil prices surging to US$200 per barrel if Iran’s disruption of the Straits of Hormuz persists.
“Rising logistics costs, raw price volatility, supply chain instability caused by the current Middle East conflict, and Iran’s real threat to force up the price of oil to US$200 per barrel due to its success in closing the Straits of Hormuz to shipping traffic,” he added.
Citing warnings from the Federation of Malaysian Manufacturers, Lim noted that Malaysia’s projected GDP growth for 2026 could decline to between 3.8 and 4.2 per cent if the crisis escalates, falling short of Bank Negara Malaysia’s forecast of 4 to 5 per cent. The SME Association of Malaysia has called for targeted support measures, including a six-month moratorium or deferment of loan repayments for affected businesses.
While Malaysia’s non-performing loan ratio remained low at 1.4 per cent in January 2026, Lim cautioned that financial distress among MSMEs could worsen if no action is taken.
He proposed three urgent measures: a moratorium on bank interest payments until the end of the year, suspension of new taxes and compliance costs including SST increases, e-invoicing requirements, and higher EPF contributions for foreign workers, and a RM5 billion fund to provide RM50,000 interest-free and collateral-free loans to 100,000 MSMEs, complemented by targeted grants and subsidies. - March 31, 2026
