B40 group suffering from rising cost of living, says finance ministry report

B40 group suffering from rising cost of living, says finance ministry report

According to the Economic Outlook 2021 report, among the key factors affecting the cost of living are poor financial planning, growth in household indebtedness and unaffordable housing.

The finance ministry’s report shows that in the span of 10 years, the income gap between the T20 and B40 has widened significantly.
KUALA LUMPUR:
Achieving a developed, high-income and an inclusive nation must be accompanied with higher purchasing power, but the rising cost of living remains a critical concern among the rakyat, particularly the low-income group.

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.

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