KUALA LUMPUR] As Malaysia rolls out its largest budget on record, phasing out subsidies and introducing broader tax measures, market watchers anticipate rising inflationary pressures while maintaining optimism about the country’s economic outlook.

Malaysia will widen the scope of its sales and services tax (SST) and reform the subsidy of a widely used fuel next year, Prime Minister Anwar Ibrahim said on Friday as he announced record budget spending of 421 billion ringgit ($98 billion).