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©The Straits Times, Singapore (Used by permission)
by Reme Ahmad, Assistant Foreign Editor

KUALA LUMPUR: Prime Minister Abdullah Badawi will focus his energies on the economy today as he unveils the annual budget amid a crisis of confidence in his leadership.

Economists say he may announce populist measures - against the backdrop of the rising cost of living - that will put more money in people's pockets such as cutting personal income taxes and lowering contributions to employees' retirement fund.

But in presenting the budget, the Prime Minister is literally facing a major distraction this year, as sitting across from him in the Lower House will be opposition leader Anwar Ibrahim.

Datuk Seri Anwar Ibrahim won Tuesday's by-election in Permatang Pauh with a thumping majority and has been appointed the Parliamentary Opposition Leader.

He was sworn in as a Member of Parliament yesterday and will be there as Mr Abdullah presents the 2009 budget in his capacity as Finance Minister.

Mr Anwar himself was finance minister for eight years and presented the budget until he was sacked in September 1998.

The Malaysian economy is forecast to grow by around 5 to 6 per cent this year, down from 6.3 per cent last year.

The economy is being battered by the global economic uncertainty, a 26-year high inflation rate of 8.5 per cent last month and lower global palm oil prices.

Economists said the populist measures expected to be unveiled by Mr Abdullah could release as much as RM5 billion (S$2.09 billion) to households.

There could also be good news for the country's one million civil servants in the form of one-month bonuses.

'The budget is expected to reduce public pain and put more money in the people's pockets to promote spending. It is possibly one last effort to shore up confidence and public support,' Mr Wan Suhaimi Wan Saidi, an economist at Kenanga Investment Bank, told The Straits Times.

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