(Reuters) - Malaysian Prime Minister Najib Razak will likely put key economic reforms on ice as he tries to rebuild voter support after his ruling coalition recorded its worst performance in 24 years in a local election in a key stronghold.
Bets are largely off for a snap general election to take place this year, with Najib expected to rethink his strategy of promoting inclusive growth in the Muslim-majority multi-cultural nation to win back the minority vote, analysts said.
In Saturday's state poll, Najib's ruling National Front retained control of its stronghold Sarawak, which accounts for a fifth of its parliamentary seats, but the opposition more than doubled its seat tally as ethnic Chinese mostly voted against the government.
Structural economic changes such as further scaling back fuel subsidies, introducing a goods and services tax and reforming a decades-old race-based policy would be relegated in Najib's list of priorities for now, analysts said.
"After the outcome in Sarawak, Najib will need a general election mandate before making any big moves," said Ibrahim Suffian, director at the independent opinion polling firm Merdeka Center.
"Enacting fuel subsidy cuts and a goods and services tax will just add to the political issues that he will have to deal with ahead of the general election."