KUALA LUMPUR Malaysia expects to save at least $1 billion to $2 billion a year from a shift to a targeted subsidy system in a bid to narrow its fiscal deficit, Bloomberg reported, citing Economy Minister Rafizi Ramli.

The government will announce a "concrete move" away from a blanket subsidy system in its budget 2024, due next week, Bloomberg quoted Rafizi as saying.

The government was also working on a system to distribute cash aid to offset the impact of inflation from reducing its subsidy allocation, Rafizi was quoted saying, adding that would benefit about 80% of the country's 8 million households.

The ministry did not immediately respond on Wednesday to a Reuters request for confirmation of the plan.

Malaysia's government currently subsidises the price of fuel, cooking oil and locally produced rice, among other essential goods, and expects to spend 64 billion ringgit ($13.54 billion) in subsidies, aid and incentives this year.

Prime Minister Anwar Ibrahim in February vowed to maintain subsidies and other government support for lower-income groups amid rising costs and slowing growth.

($1 = 4.7250 ringgit)

(Reporting by Danial Azhar; Editing by Martin Petty)