Malaysia’s plan to recalibrate subsidies on the widely used RON95 fuel is unlikely to trigger a meaningful spike in inflation, according to leading economists. In a pivotal assessment of the policy design and its potential macroeconomic consequences, researchers note that the initial price adjustment—reducing the RON95 price to RM1.99 per litre for eligible Malaysians—could shave a modest amount off inflation on an annual basis, with far smaller effects in the near term as the scheme starts to take effect at the end of September. While the headline numbers point to a contained inflation path, the broader implications hinge on how the subsidy framework evolves, who it covers, and how businesses and households adjust to the new pricing signals.
Subsidy reform design and near-term inflation implications
The subsidy reform targeting RON95 is framed as a measured step in recalibrating government support for energy consumption among ordinary Malaysians. Preliminary estimates from RHB Global Economics and Market Strategy project that the price cut for eligible consumers would contribute to a reduction in the year-on-year inflation rate by roughly 0.1% to 0.2% on an annual basis. In the very immediate term, the impact is anticipated to be even smaller, around 0.03% to 0.04%, as the subsidy scheme becomes effective only toward the end of September. This reflected, in part, the policy’s incremental rollout and the time required for households to adjust to the new price framework and for businesses to align their pricing strategies with the revised subsidy regime.
The mechanics of the reform are crucial to understanding the inflation signal. By lowering the price of the subsidized fuel for a defined group of eligible Malaysians, the government seeks to alleviate the direct cost burden on everyday commuting, transport, and logistical activities that are sensitive to energy prices. The anticipated inflation response depends on how broadly the beneficiaries are defined, how robust the uptake is among those eligible, and how responsive consumer behavior is to the price change. The early estimates suggest a tame inflation response overall, with the bulk of the effect absorbed by the initial pass-through from the lower pump price into retail and service pricing.
From a policy design perspective, the RON95 subsidy adjustment represents a targeted form of fiscal support rather than a broad, universal price intervention. It aims to shield lower- and middle-income households from a sharper energy price shock while gradually benchmarking energy subsidies to more sustainable levels as the fiscal position evolves. The plan’s early emphasis on administrative feasibility—ensuring that the relief goes to those who meet eligibility criteria—also shapes the likely inflation dynamics. Economists caution that the immediate pass-through to consumer prices may be modest because many energy- or transport-related prices adjust with delays, and because the direct price channel from the subsidy reform constitutes a relatively small share of the overall consumption basket in the near term.
In addition to direct price transmission, the inflation path will be influenced by secondary channels, including transportation costs linked to freight and logistics, service pricing in sectors sensitive to energy costs, and consumer expectations about future price trajectories. The initial assessment from RHB highlights that the scheme’s early effects on inflation will be modest precisely because the reform is designed to be incremental, with initial coverage that does not yet address broader high-value asset ownership or income-based differentiations. The emphasis on a phased rollout implies that investors, consumers, and firms will have time to adapt, reducing the probability of abrupt price shocks that could otherwise destabilize inflation expectations.
Looking beyond the first wave of implementation, the research notes the potential for policy refinements as the framework evolves. The current round does not explicitly target higher-income groups, nor does it address households with luxury cars or other high-value assets in depth. As such, future phases of the subsidy reform could alter the macroeconomic balance between supply shocks and demand responses, depending on who continues to receive subsidy relief and how those decisions affect consumption patterns. This caveat is one of the reasons why economists emphasize the importance of monitoring indicators such as transport costs, service sector pricing, and consumer sentiment as the policy progresses.
The near-term inflation effect also interacts with other domestic macroeconomic dynamics. If the economy experiences a softer demand environment, inflationary pressures may remain subdued even as energy prices experience fluctuations. The policy’s timing, aligning subsidy reform with a backdrop of potentially cooler demand and slower growth in the latter part of the year, could reinforce a managed inflation scenario rather than unleash a surge. In this sense, the subsidy adjustment acts more as a stabilizing policy tool than as an impulse amplifier, contributing to a predictable inflation path through direct price support for energy while allowing broader price pressures to be governed by real-economy factors such as wage growth, productivity, and consumer spending patterns.
In sum, the initial interpretation from RHB and allied analysts is that the RON95 subsidy reform, while politically and fiscally significant, is unlikely to deliver a large or abrupt impact on overall inflation in the near term. The estimated direct effect on inflation is small at the outset, and the broader annual effect remains in a modest range of 0.1% to 0.2%, with the immediate impact likely to be limited to 0.03% to 0.04%. The design’s phased nature, plus the ongoing evaluation of eligibility criteria and potential future adjustments, suggest that inflation dynamics will evolve gradually rather than in a sudden shift.
This nuanced view must be balanced with caution that policy transmission can vary across sectors. Sectors with higher energy intensity, such as logistics and transportation services, may feel more immediate price movements if energy costs shift materially in either direction. In contrast, non-energy-intensive services and consumer goods may experience more muted effects as price signals propagate through the economy with lags. The overall inflation framework thus remains anchored in a combination of supply-side factors, demand conditions, and the evolving policy architecture surrounding RON95 subsidies.
To ensure clarity, it is essential to understand that the official inflation projection remains a function of a broad set of variables beyond the subsidy reforms. The government’s targeted approach, the pace of implementation, and any subsequent refinements all contribute to the inflation trajectory. In short, the near-term inflation impact of the RON95 subsidy reform is expected to be small, while the longer-term effect will depend on how comprehensive and inclusive the subsequent policy phases become, and how other catalysts in the economy interact with these subsidy changes.
Distributional considerations and policy evolution
The design of subsidy reforms rests not only on macroeconomic projections but also on distributional outcomes that determine who benefits and how consumption patterns adapt. In this round of RON95 subsidy reform, the official outline has emphasized eligibility-based relief—an approach intended to direct assistance to a broad segment of vehicle owners who rely on RON95 for daily transport needs. However, economists caution that the policy may not fully address the distributional spectrum, especially higher-income households or individuals with luxury vehicles, a segment that could potentially absorb more of the subsidy burden if left unaddressed in future revisions.
A critical question in the policy discourse concerns whether higher-income groups and owners of luxury cars should be included or excluded from subsidy relief in subsequent phases. The rationale for exclusion in the initial rollout is often grounded in fiscal prudence and the desire to allocate limited subsidies to those most in need, while avoiding excessive leakage through non-targeted consumption channels. Yet, as the program evolves, there remains a possibility that policymakers will broaden or refine eligibility criteria to capture a larger share of consumption spending without compromising the objective of fiscal sustainability. The decision to include or exclude certain groups will have a direct bearing on the inflation path, as broader subsidy coverage could more widely dampen energy-related price pressures, while narrower coverage could shift price dynamics toward other sectors.
From a macroeconomic perspective, the evolution of the subsidy framework may influence the inflation trajectory through multiple channels beyond the immediate price of energy. First, the distribution of subsidy relief affects household disposable income and, subsequently, consumer spending patterns. If relief is concentrated among middle- and lower-income households, increases in real purchasing power could buoy demand for goods and services, potentially elevating price pressures in certain segments of the economy. Conversely, if subsidies are narrowly allocated to a smaller group, the net effect on aggregate demand could be more modest, reinforcing a controlled inflation outlook consistent with the current projections.
Second, the policy’s design could influence substitution effects across fuels. If RON95 subsidies are reduced or targeted more tightly toward specific segments, consumers might adjust their travel behavior, vehicle choices, or fuel mix, potentially affecting demand for other energy inputs or transportation modes. These substitution effects can alter the composition of inflation across the consumer basket, with possible implications for service prices in sectors linked to mobility, such as logistics and ride-hailing, as well as for the broader energy price index. The exact magnitude of these shifts remains uncertain and depends on behavioral responses, price elasticities, and the relative competitiveness of alternatives.
Third, the subsidy reform may interact with other fiscal and tax measures, particularly in areas such as service taxation. If service tax coverage broadens or intensifies alongside energy subsidy reforms, there could be a concurrent effect on price levels in services sectors that are influenced by energy costs and by the broader cost of doing business. In such a scenario, while energy costs themselves may be mitigated through targeted relief, service prices could experience modest adjustments due to changes in the cost structure faced by service providers. The net effect on inflation would be the sum of these opposing forces, with careful monitoring required to ensure a stable macroeconomic outcome.
The question of whether early relief should be extended to a wider pool of consumers or kept tightly targeted is inherently tied to fiscal considerations and political economy as well. Policymakers must weigh the trade-offs between budgetary sustainability and social equity, taking into account the potential for gradual inflationary spillovers from more expansive subsidy coverage. The conversation around this topic is ongoing, and analysts highlight that any future refinements will likely be accompanied by updated projections and risk assessments that reflect evolving economic conditions, external price pressures, and domestic demand signals.
In practical terms, the distributional dimension of subsidy reforms will show up in the pricing data you observe in the months following the policy change. If the relief is effectively targeted and the eligible group consumes a sizable portion of subsidized fuel, you may see a dampening of energy-related price pressures within the overall inflation measure. However, if leakage occurs or if subsequent phases broaden coverage to include segments that exert stronger demand pressure, inflation could experience a modest shift higher in certain months. The key takeaway for observers and policymakers is that the distributional design has meaningful implications for the inflation path, and remains a focal point for ongoing policy evaluation.
To maintain transparency and public confidence, it is important that the authorities publish clear criteria for eligibility and communicate the expected timeline for potential expansions or revisions. This enables households and businesses to calibrate their expectations and adjust their financial planning accordingly. The broader lesson from distributional considerations is that subsidy reforms are not merely technical fiscal instruments; they shape consumer behavior, sectoral price dynamics, and ultimately the rate of inflation through complex, interlinked channels. Economists therefore emphasize the need for continuous monitoring, data-driven adjustments, and a well-articulated communications strategy to accompany any policy evolution.
Near-term macroeconomic outlook and inflation trajectory
The macroeconomic landscape in which the RON95 subsidy reform unfolds is characterized by a measured outlook for inflation, underpinned by a balance between subdued demand pressures and the prospect of a soft-to-modest growth trajectory in the second half of the year. In its assessment, the research house notes that inflation is expected to stay manageable in the current year, supported by the absence of excessive demand pressures and the anticipated economic slowdown in the latter part of 2025. This combination—lower demand growth, modest wage pressures, and a cautious consumer mood—contributes to a price environment that is unlikely to overhear the central bank’s inflation targets.
The latest readings on the consumer price index reinforce this cautious outlook. Malaysia’s CPI rose by 1.3% year-on-year in August, a modest uptick from July’s 1.2% and broadly in line with market expectations. While this increment represents a continuation of a gentle inflationary trend, it does not signal an overheating economy. The August figure sits within the bounds of the official forecast range and aligns with expectations of a gradual easing in price pressures as supply chains stabilize and energy price volatility subsides. The data thus provides some validation for the central forecast that inflation will remain within a controlled corridor for the foreseeable future.
In parallel, other forecast updates from the research community reflect a consistent theme: inflation is expected to stay within a modest band, even as subsidy reforms unfold and energy prices adjust. For instance, Kenanga Research trimmed its 2025 inflation forecast to 1.5% from 1.7%, indicating that while the Budi Madani RON95 subsidy scheme and broader service tax coverage may influence price trends, the overall impact is likely to be modest. The logic rests on the premise that the monthly CPI would need to pick up more sharply than expected—0.4% in each month through year-end—to derail the annual target. Kenanga, however, models a softer path, assuming 0.2% monthly increases, which sustains an annual average near 1.5%.
MBSB Research also revised its 2025 inflation outlook downward, from 1.8% to 1.4%, citing subdued cost pressures more broadly, the reduction in subsidized RON95 prices, and easing transport costs. The assessment adds that domestic demand could gain traction following July’s policy rate cut, supported by a robust labor market, ongoing fiscal measures, and the prospect of delayed subsidy changes. Yet even in this more optimistic scenario, inflation remains contained, with the central bank expected to maintain an accommodative stance only as long as price pressures stay under control and financial conditions support sustainable growth. In line with these expectations, MBSB projects the policy rate, specifically the overnight policy rate, to remain at 2.75% for the remainder of the year.
A closer look at the transmission mechanism reveals several interlocking channels through which the subsidy reform could affect inflation. The direct channel is straightforward: subsidy relief lowers the price households pay at the pump, reducing the cost of energy-intensive consumption and easing transport-related expenses. However, this direct benefit may interact with indirect channels, such as changes in service prices that reflect energy costs, adjustments in logistics pricing, and shifts in consumer demand that affect non-energy goods and services. The net inflation outcome therefore depends on how energy costs feed into broader price indexes, how quickly businesses pass through changes in input costs, and how consumers adjust their spending across goods and services.
Another critical dimension is monetary policy, particularly the stance of interest rates in the period ahead. The July OPR cut, which signaled a willingness to support growth through lower borrowing costs, interacts with subsidy reforms by providing a supportive macroeconomic backdrop for consumption and investment growth. A lower policy rate tends to stimulate demand, which can, in turn, feed through to higher prices if demand becomes stronger than supply reflects. The forecast that the OPR could stay at a relatively accommodative level for the rest of the year underpins the expectation that inflation remains contained rather than accelerating, as the central bank balances the need for price stability with the goal of sustaining growth.
Labor market dynamics, government fiscal measures, and transport cost trends are additional variables that contribute to the inflation narrative. A robust labor market provides the income support households need to sustain consumption without triggering wage-driven inflation. Fiscal measures, including targeted subsidies and potential tax adjustments, serve to calibrate the overall price level by moderating the impact of energy price shifts on the household budget. Transport costs, closely linked to energy prices and vehicle usage patterns, can swing inflation in the short term, even as energy subsidy reforms gradually reallocate price pressures across sectors.
In this context, the August CPI data, the anticipated policy trajectory, and the projected pathway for discretionary fiscal measures combine to paint a picture of inflation that remains within a manageable band. The consensus among analysts is that the inflation trajectory will reflect a careful balance between energy price reforms, consumer demand, and the central bank’s policy stance. The near-term outlook continues to emphasize a controlled rate of inflation, rather than a sharp escalation, as the economy adjusts to new subsidy arrangements and as the macroeconomic environment evolves.
Kenanga Research’s revised forecast and rationale
Within the broader set of forecasts, Kenanga Research’s adjustment of the inflation outlook for 2025 embodies the nuanced view that subsidy reforms and tax coverage can shape price dynamics without derailing the overall inflation path. The firm lowered its 2025 inflation forecast to 1.5% from 1.7%, arguing that while the Budi Madani RON95 subsidy scheme and expanded service tax coverage may influence price trends, the aggregate effect on inflation is likely to be modest. The implicit assumption in this scenario is that the price mechanism will absorb these changes without triggering a self-reinforcing inflationary spiral.
A central element in Kenanga’s reasoning concerns the monthly CPI trajectory necessary to hit earlier projections. The research notes that sustaining the previous inflation forecast would require a monthly CPI increase of around 0.4 through the end of the year. This scenario is deemed unlikely by Kenanga, which instead models a more moderate path with monthly increases of around 0.2%. The resulting annual average inflation sits at approximately 1.5%, indicating a softer inflation environment than initially anticipated. This assessment reflects an expectation that the energy subsidy reform’s influence will be gradual, with price channels adjusting to the new framework over time.
Kenanga’s analysis also contemplates the interplay between the RON95 subsidy scheme and service tax coverage. While these policies may introduce upward pressure in some components of the price index, they can also be offset by the downward pressure from lower energy costs, providing a net effect that remains contained. The research highlights that the net effect will depend on how broadly subsidy benefits are distributed and how readily service sectors adjust pricing in response to reduced or stabilized input costs. The balancing act between these opposing forces is a key determinant of the inflation outcome in 2025.
In addition to inflation forecasts, Kenanga pays attention to the broader price dynamics and the potential macroeconomic consequences of the subsidy reforms. The house considers the risk that if subsidy policies become increasingly regressive or poorly targeted, they could produce unintended effects on consumption patterns, wealth distribution, and overall demand. However, within the baseline scenario, the firm expects that the reforms will be implemented in a way that preserves price stability while gradually reducing the fiscal burden associated with energy subsidies. This stance aligns with the broader expectation that inflation will remain within controlled confines while growth continues at a modest pace.
Kenanga’s projection also implicitly emphasizes the role of policy credibility and the need for ongoing assessment. As the subsidy reform unfolds, continuous monitoring of price indicators, consumer sentiment, and sectoral price movements will be essential. Short-term fluctuations may arise as price channels adjust, but the overarching forecast remains that inflation will stay within a manageable range. The emphasis on data-driven adjustments underscores the importance of transparent policy communication and timely revisions as new evidence emerges.
A key takeaway from Kenanga’s analysis is the recognition that subsidy reform alone is unlikely to be a dominant inflationary driver in 2025. Its impact appears to be one of many factors shaping the inflation trajectory, with a net effect that is manageable and in line with the central bank’s target range. The research underscores the importance of considering the cumulative influence of policy measures, external price pressures, and domestic demand conditions when evaluating the inflation outlook. In this view, the RON95 subsidy reform serves as one policy instrument among many that collectively shape the price stability landscape for the year ahead.
To policymakers, Kenanga’s forecast provides a useful basis for calibrating expectations and refining the communication around subsidy reform. By signaling a modest impact on inflation and acknowledging the potential role of service tax coverage, the forecast helps set a framework for how price dynamics may evolve under the policy’s evolution. The emphasis on gradual adjustment, data-driven recalibration, and careful risk assessment resonates with the broader objective of maintaining price stability while pursuing reforms that improve fiscal sustainability and resource allocation.
MBSB Research and implications for the inflation path
MBSB Research presents its own nuanced revision of the inflation outlook for 2025, moving its forecast down to 1.4% from 1.8%. The revision stems from several interrelated factors, including subdued cost pressures across the economy, the reduction in subsidised RON95 prices, and easing transport costs. These factors combine to reduce the upward pressure on the general price level, fostering a scenario in which inflation remains contained despite subsidy reforms and other policy shifts.
The research emphasizes that demand could build in the wake of July’s overnight policy rate (OPR) cut, supported by a resilient labor market, ongoing fiscal measures, and delayed subsidy changes. The combination of higher disposable income growth and lower borrowing costs has the potential to bolster consumer spending and, by extension, demand-pull inflation pressures. However, within the baseline scenario, these effects are expected to be offset by other stabilizing forces, namely dampened cost pressures and energy pricing dynamics, which help to keep inflation within a controlled trajectory.
A critical aspect of MBSB’s view is that monetary policy is likely to stay supportive for the remainder of the year. The house projects the OPR to remain at 2.75% through the rest of the year, aligning with a strategy of cautious accommodation designed to sustain growth while keeping inflation under control. The stance implies that the central bank is prioritizing a stable macroeconomic environment where price stability remains achievable even as subsidy reforms unfold and consumer demand responds to policy signals.
MBSB’s analysis also highlights the interplay between energy subsidies and transport costs. A decline in subsidised RON95 prices, all else equal, tends to reduce operating costs for transport-heavy industries and sectors reliant on energy inputs. This development can, in turn, dampen price growth in related services and goods, contributing to a softer inflation path. Yet the research also acknowledges the possibility that the post-cut demand environment could exert upward pressure on prices if increased consumption outpaces supply adjustments or if service sectors respond with higher markups to restore profit margins.
From a policy perspective, MBSB emphasizes the importance of monitoring the transmission of subsidy reforms through to consumer prices and the broader economy. The research points to several risk factors that could alter the inflation outlook, including shifts in global energy markets, exchange rate movements, and changes in domestic fiscal policy. The presence of these risk factors underscores the need for a flexible policy framework that can adapt to evolving conditions while maintaining discipline over price stability.
In synthesis, MBSB’s inflation forecast adds nuance to the overall outlook by attributing a downward revision to cost pressures and subsidy dynamics, while acknowledging that domestic demand growth and policy transmissions could modulate inflation in ways that require careful observation. The projection of a 2.75% OPR level for the remainder of the year complements this view, suggesting a balanced approach that supports growth without compromising the central bank’s inflation objective.
Transmission channels, risks, and policy coherence
The interplay between subsidy reforms, inflation dynamics, and monetary policy pathways hinges on several fundamental transmission channels. The most direct channel is the price signal transmitted through fuel and energy costs to consumer prices. A lower RON95 price for eligible households can reduce the expenditure basket’s energy component, which, in turn, can ease inflationary pressure across a range of goods and services that rely on transportation. The magnitude of this effect depends on the share of energy-related costs within the consumption basket and how quickly other prices adjust in response to energy price movements.
Another critical channel is the pass-through of energy cost reductions to service pricing. Transportation costs influence logistics pricing, which can feed into the price of consumer products, including food and non-durables that require movement and distribution. If energy costs decline or are kept low for a large segment of consumers, service providers might maintain or reduce markups, thereby contributing to a more subdued inflation path. This chain of effects is particularly relevant for sectors with high energy intensity, such as logistics, shipping, and public transportation.
The policy’s distributional structure also matters for inflation. If subsidies reach a broad base of lower- and middle-income households, consumer demand could be buoyed, which could produce modest price pressures in certain categories as demand outpaces supply responses. Conversely, if subsidy benefits are narrowly targeted, the inflationary impact might be limited to energy and transport-related prices, with less broad-based demand-pull pressures. The extent to which the program reaches different income groups will thus shape the overall inflation signal.
Monetary policy transmission remains a salient risk factor for inflation. The OPR trajectory, in tandem with fiscal policy responses to subsidy reforms, will determine the stance of liquidity and credit conditions in the economy. An accommodative policy posture can amplify consumption growth, potentially offsetting some of the disinflationary effects of subsidized energy prices. On the other hand, if inflation pressures begin to intensify, the central bank would face a policy dilemma: balance the need to maintain price stability with the objective to preserve growth momentum. The degree to which subsidy reforms influence this balance depends on how the price adjustments ripple through the economy and how strongly demand responds.
External price developments also play a role. Global energy markets affect domestic fuel prices and transport costs, and thus influence inflation through import prices and exchange rate dynamics. If external energy prices rise or fall significantly, the domestic inflation path could deviate from the baseline forecast, depending on how the subsidy reform modulates the domestic price mechanism. A flexible policy framework that can accommodate such shocks is crucial to maintaining price stability.
Within this context, the overall coherence of policy is essential. The RON95 subsidy reform must harmonize with broader energy, fiscal, and tax policies to avoid conflicting incentives that could weaken the inflation-targeting framework. For instance, if subsidy reforms are accompanied by broader service tax expansion, the resultant price path could reflect competing pressures: energy subsidies serve to temper energy-related costs, while higher taxes or broader tax coverage could push up service prices. The net effect on inflation will depend on the balance between these forces and the economy’s ability to absorb them without destabilizing price expectations.
There is also a need for ongoing monitoring and data-driven adjustments as the policy unfolds. The initial impact estimate—0.03% to 0.04% in the near term and 0.1% to 0.2% on an annual basis—will evolve as more data become available and as eligibility criteria are refined. Clear communication about policy goals, timelines, and adjustment pathways will help anchor expectations and reduce uncertainty in financial markets and households. The combination of targeted subsidies, fiscal prudence, and a flexible monetary framework is designed to preserve price stability while gradually aligning energy policy with long-term sustainability objectives.
In practice, headline inflation remains a function of multiple interacting elements: energy price movements, housing costs, transport costs, wage dynamics, consumer confidence, and global price pressures. The subsidy reform is a single, albeit important, component of a broader policy mix. Its success in contributing to a stable inflation path will depend on how effectively it is implemented, whether eligibility expands or remains limited, and how the economy responds to the new price signals in the context of ongoing macroeconomic conditions. Economists will watch these developments closely, with particular attention to monthly CPI readings, sectoral inflation measures, and indicators of household purchasing power.
Conclusion
The move to adjust subsidies for the RON95 fuel in Malaysia is designed to recalibrate energy support in a way that aims to balance fiscal responsibility with social protection. Early estimates point to a modest, contained impact on inflation, with the initial effect being small but notable in signaling a shift toward more targeted support. Forecasters emphasize that the subsidy framework’s trajectory—whether it remains tightly targeted or expands to cover a broader population—will be pivotal in shaping inflation in the coming months and into 2026. The near-term inflation outlook remains favorable, with RHB projecting 2025 inflation around 1.6% and other institutions estimating similar ranges, conditioned on the absence of unexpected demand surges and energy price volatility. As the policy unfolds, the economy will likely experience a gradual adjustment process, aided by a continued supportive monetary stance and a resilient labor market.
Analysts across RHB, Kenanga, and MBSB concur that inflation is unlikely to accelerate sharply in the near term, though they acknowledge varying degrees of sensitivity to subsidy reforms and service tax changes. The expected moderation in cost pressures, combined with the ongoing policy mix and the potential for delayed subsidy changes, supports a controlled inflation trajectory through year-end. The next steps will involve assessing the distributional impact of eligibility criteria, tracking price movements across energy-sensitive sectors, and watching how monetary and fiscal policies interplay with evolving subsidy arrangements. Policymakers and stakeholders should maintain a focus on data-driven assessment, clear communication, and careful calibration to sustain price stability while pursuing reforms that promote fiscal sustainability and broader economic resilience.