Malaysians could see prices rise before shortages hit as Strait of Hormuz tensions prompt businesses and households to adjust for higher costs.
PETALING JAYA: Malaysians may start paying more even before shortages emerge as uncertainty over the Strait of Hormuz prompts businesses to adjust prices and households to brace for higher living costs.
Economists warn that the earliest impact of the crisis may come not from physical disruptions but from sentiment-driven behaviour that influences pricing, spending and investment decisions across the economy.
Malaysian Institute of Economic Research and Universiti Malaya Social Wellbeing Research Centre senior research fellow Dr Zulkiply Omar said market sentiment would be the fastest transmission channel, ahead of actual cost pressures.
He said while higher oil prices, freight costs, fuel subsidies and imported inflation would eventually filter through the economy, these effects typically take longer to materialise along the supply chain.
“Tensions in the Strait of Hormuz will raise oil prices and global shipping costs. This will increase fuel subsidy costs, logistics costs and imported inflation. It will also have a multiplier effect on production costs across the supply chain.
“However, the impact through those channels is not immediate. It is slower. The fastest channel is market sentiment, which takes effect almost instantly.
“Sentiment will influence the behaviour of producers and consumers, and markets will respond based on expectations, even if the actual impact is not yet certain,” he told theSun.
Zulkiply cautioned that the situation should not be viewed as a temporary shock, warning that a more volatile external environment could persist and reshape economic behaviour over time.
He said businesses would need to improve efficiency, adopt appropriate technologies and strengthen innovation, while households may have to adjust spending habits, conserve energy and rely more on alternatives such as public transport and home cooking to manage rising costs.
Putra Business School director of MBA programmes Prof Dr Ahmed Razman Abdul Latiff said the more immediate pressure point for Malaysia would be fiscal, particularly the cost of sustaining fuel subsidies if global oil prices remain elevated.
He said while the government could still absorb the pressure in the short term, prolonged disruption would significantly strain fiscal management and narrow policy space.
“If tensions in the Strait of Hormuz persist, the fastest pressure on Malaysia’s economy will come through fiscal stress driven by rising fuel subsidies. With subsidy costs already exceeding RM3 billion a month, Malaysia may still be able to absorb the pressure in the short term if prices remain high but stable.
“However, if the disruption continues and oil prices remain elevated over a longer period, pressure on the fiscal deficit and consolidation commitments will intensify.”
Ahmed Razman said if the crisis drags on, the impact would widen across supply chains, with transport and logistics sectors likely to be affected first, followed by energy-intensive manufacturing and food industries dependent on imports.
He added that lower and middle-income households would bear the greatest burden as the cost of essential goods continues to rise.
