Malaysia to hold state polls in August in crucial test for PM Anwar

KUALA LUMPUR (Reuters) - Malaysian Prime Minister Anwar Ibrahim's coalition government will face its first public vote of confidence in August, when six key states will head to the polls, the election commission said on Wednesday.

While the regional polls will not directly impact Anwar's two-thirds majority in parliament, any significant losses for his coalition could lead to questions about his leadership and destabilise his ruling bloc, which came to power after a closely fought and divisive national election in November.

The six states of Selangor, Penang, Negeri Sembilan, Kelantan, Terengganu and Kedah will vote on Aug. 12, Election Commission chairman Abdul Ghani Salleh said at a press conference.

Anwar's coalition is currently in power in three of the six states.

The elections will pit Anwar's progressive, multi-ethnic coalition against a mostly conservative ethnic-Malay, Muslim alliance led by former premier Muhyiddin Yassin.

Muhyiddin's bloc is expected to pose a strong challenge to Anwar's after making huge inroads in the Malay heartlands in the November election.

The alliance has portrayed itself to be clean of corruption, whereas Anwar has faced criticism for joining hands with a corruption-tainted party to form a government.

Anwar decided to form an alliance with the United Malays National Organisation (UMNO), his coalition's former long-time rival, to gain a majority in parliament.

Several of UMNO's top leaders face criminal corruption charges, including its president Ahmad Zahid Hamidi who is Anwar's deputy.

A slowing economy and higher costs of living will be major election issues for voters in the state polls.

Malaysia's economy is expected to grow slower than last year due to global pressures. The ringgit, which has lagged regional peers in Southeast Asia, is trading near a 7-month low.

Since coming to power, Anwar has focused on introducing economic and institutional reforms, including reducing subsidies for the wealthy, easing listing rules for companies, and abolishing the mandatory death penalty.

(Reporting by A. Ananthalakshmi and Rozanna Latiff; Editing by Kanupriya Kapoor)