
According to the Economic Outlook 2021 report released by the finance ministry today, from 2016 to 2019, the Consumer Price Index rose by 1.8% while the median household income increased by 3.9%.
“The World Bank (2019) reports that although the median income continued to outpace inflation, the income growth for low-income Malaysians slowed between 2014 and 2016.
“The report also highlights the disparity in purchasing power of households in different parts of the country,” it said.
According to the report, poor financial planning, growth in household indebtedness and unaffordable housing were among the key factors affecting the cost of living.
“Furthermore, the mean income of the top 20% (T20) and the bottom 40% (B40) of households widened from RM8,679 in 2009 to RM15,354 in 2019. This signifies the widening of the income gap between the two groups.”
Meanwhile, the report said as Malaysia progressed towards a high-income and developed nation, the problem of regional development imbalance continued to persist.
“While the more developed states continue to record above-average per capita income, the income gap among states remains. For instance, Sabah’s income per capita was 45.5% below the national average, and that of Kedah and Kelantan was at 51.8% and 69.2% respectively.”
It also reported that in 2019, Kuala Lumpur and Putrajaya recorded the lowest poverty rates of 0.1% and 0.4% of households, respectively.
“In comparison, states such as Sabah and Kelantan recorded significantly higher poverty rates of 19.5% and 12.4% respectively. This illustrates a pronounced disparity in economic development among states in Malaysia,” the report said.
It also said that unsustainable consumption and production practises as well as lack of shared responsibility among stakeholders, continued to impact the well-being of the rakyat.