Anwar said the phased implementation of the wage hike will help the government to closely monitor its effect on inflation.

“That is why the increase (of wages) is done in phases from December, and it will be followed through to the following year (2025),” he said during the “Soal Jawab Perdana Menteri” programme broadcasted by all local television stations.

“So, if it (inflation) goes up, it will be under control because as we know, inflation in our country is the lowest in Asia.

“We expect a slight increase… (That’s) acceptable. But if it’s relatively high, it will burden the people.”

Malaysia’s inflation rate stood at 1.8% in March. Inflation for the first quarter (Q1) of 2024 was recorded at 1.7% compared to 1.6% in Q4 2023.

Earlier today, Anwar announced that the government would increase the remuneration of civil servants by more than 13% this year – which he said would be the highest ever given to civil servants.

He said the total income, including allowances, of civil servants on the lowest salary scale would, for instance, increase to a minimum of RM2,000 per month from the current RM1,795.

Anwar, who is also the finance minister, said the government had allocated more than RM10 billion for the salary adjustment, which would be applicable to all civil servants.

Civil service pay hike to balance income gap

Anwar said the salary increase of more than 13% was aimed at balancing the income gap between those in the lower and higher grades of the civil service, adding that the Cabinet would hold further discussions before finalising the matter.

He also hoped that civil servants would increase their productivity in line with the salary hike, which he said was to show the government’s appreciation for the civil servants’ contribution and service to the country.

“For those in the low-income group, their salary increase may be up to 25% or 30%. I’m prioritising those in the low-income group and reducing the salary increases for those in the high-income group,” he was quoted as saying in a Bernama report.

“It is hoped that this will encourage civil servants to work harder and stop being sluggish, lazy, and wasteful. All ministries need to monitor (their staff) so that starting from this month, we will see improvements in all aspects.

“The people should not be kept waiting for hours. We need to be efficient, there must be changes. I hope for something better.”