Despite optimistic GDP growth and a low unemployment rate, many Malaysians are still unconvinced about the recovery of their economic well-being, with experts highlighting the rising cost of living as a key factor behind this skepticism as reported in FMT.
Economists point out that while Prime Minister Dato' Seri Anwar Ibrahim's administration has recorded positive economic indicators such as GDP growth rising from 3.3% last year to 5.3% in the third quarter of 2024, many low- and medium-income households continue to feel the pinch from escalating prices. According to Yeah Kim Leng, an economist at Sunway University, the increase in the cost of essentials like food, medical expenses, and tuition fees is overshadowing any potential benefits from Malaysia's stronger GDP growth and a relatively stable 3.2% unemployment rate.
"What matters most to people is the amount of money they actually take home," says Yeah. "For many, this has not improved, even with a positive GDP growth forecast." The financial strain on these households has worsened as their purchasing power remains stagnant, forcing them to struggle to make ends meet.
A recent Merdeka Center survey reflects a mixed public sentiment. While Anwar's approval rating has increased by 4%, reaching 54% in his second year, Malaysians are still skeptical about the government’s efforts to strengthen the economy. Experts like Ahmed Razman Abdul Latiff from Putra Business School suggest that the delayed effects of fiscal and monetary policies, such as cash aid and adjustments to interest rates, might be contributing to public dissatisfaction.
Economic policies aimed at improving income and purchasing power may take time to yield results. Measures like the new minimum wage of RM1,700 and the progressive wage policy set for next year may offer long-term relief, but the immediate impact on the everyday lives of Malaysians remains unclear.
Looking ahead, economists have lauded the government's shift in focus for the 2025 budget. Instead of pushing for new mega projects, the government is emphasizing measures that aim to boost the income of Malaysians, particularly those in the B40 group. Abu Sufian Yaacob, a professor at Universiti Malaysia Kelantan, argues that improving purchasing power will lead to a “win-win” situation for both the people and the economy. With inflation and rising costs making it harder for households to save, the focus on enhancing income is seen as a pragmatic approach to revitalizing the economy.
Experts like Ida Yassin of Putra Business School agree with the government’s shift toward people-centric initiatives, noting that investing in welfare, subsidies, and the development of human capital is key to ensuring long-term economic growth. However, they also suggest that in the future, greater attention should be given to capital formation to support industrial and infrastructure development.
Ultimately, as Malaysia navigates its path toward recovery, the question remains: can the government balance immediate relief for struggling households with long-term economic growth strategies? For many, the success of this recovery depends on whether their day-to-day struggles with the rising cost of living can be alleviated before the benefits of larger economic policies begin to materialize.
By: Kpost
Information Source: Fmt , Fmt , bnm
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