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| PUTRAJAYA: Malaysia's average monthly household income rose to RM9,155 in 2024, up 3.8 per cent from 2022, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
Economists said this reflects steady growth that could translate into improved purchasing power, particularly as inflation continues to ease.
They, however, cautioned that sustaining real income gains requires a balanced policy approach.
Malaysia's inflation dropped from 2.5 per cent in 2023 to 1.8 per cent in 2024, and averaged around 1.4 per cent in the first eight months of this year.
Amir Hamzah made the remarks at a press conference following the launch of the Household Income and Expenditure Survey (HIES) 2024 Report here today.
HIES is an important tool for tracking the progress of households in Malaysia that provides the government with information on income, spending, poverty levels and household income groups.
The survey shows that the median household income in Malaysia reached RM7,017 in 2024, growing 5.1 per cent annually, while the mean household income rose 3.8 per cent to RM9,155.
Six states recorded median household income above the national level, led by Kuala Lumpur at RM10,802.
This is followed by Putrajaya (RM10,769), Selangor (RM10,726), Johor (RM7,712), Penang (RM7,386) and Labuan (RM7,383).
Penang recorded the highest annual growth rate at 6.4 per cent between 2022 and 2024, while Perak registered the lowest at 2.1 per cent.
Economists said to sustain this momentum, both income growth and price stability must be addressed through coordinated policies.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said higher incomes require improved productivity, better skills and industries that can offer competitive wages based on qualifications.
Meanwhile, prices must be kept in check through strong enforcement and by fostering competitive markets that ultimately benefit consumers.
"Furthermore, the government should promote competitive markets where prices become more flexible which would benefit the consumers. So it's a wholesome approach in order to improve the purchasing power among Malaysians," Afzanizam added.
Putra Business School economic analyst professor Dr Ahmed Razman Abdul Latiff said to truly assess whether income growth improves purchasing power, household income must be compared against average monthly expenditure.
This reveals if families are left with disposable income - what's left after covering all costs.
A positive balance means households can afford better food, save or invest, ultimately improving long-term financial well-being, he said.
A negative balance, however, suggests reliance on debt to meet basic needs.
For deeper insights, this comparison should also account for urban-rural and state-level differences to reflect the true impact of inflation and cost of living.
Economist Dr Geoffrey Williams said although household income has increased by 3.8 per cent since 2022, overall prices are 4.3 per cent higher. This means that purchasing power has fallen by around RM43 per month.
"Food and beverage prices has risen more than five per cent over the same period so people will see the squeeze on spending power in their grocery bills and eating out," Williams said.
Meanwhile, Amir Hamzah said Malaysia is close to ending hardcore poverty with the national rate falling to 0.09 per cent.
Based on international practice, hardcore poverty is considered achieved when the rate is three per cent or below, according to the Statistics Department.
He said the government's current focus is to completely eliminate hardcore poverty by addressing the remaining 7,000 households still categorised under this group.
"Once we have identified the 7,000 households, I believe we can achieve zero hardcore poverty.
"The challenge is that new cases may emerge unexpectedly, such as when individuals lose their jobs. However, our social protection network is designed to respond quickly," he said.
The national absolute poverty incidence narrowed to 5.1 per cent in 2024 from 6.2 per cent in 2022, representing about 416,000 households.
Poverty in urban area declined to 3.7 per cent, while poverty in rural improved to 10 per cent.
The hardcore poverty incidence dropped to 0.09 per cent, equivalent to fewer than 8,000 households earning below the Food Poverty Line Income.
Amir Hamzah said the government's initiatives, from urban economic empowerment to social well-being programmes, have proven effective and will continue under the Madani framework.
The Gini coefficient, which measures income inequality, also showed improvement, narrowing from 0.404 in 2022 to 0.390 in 2024, indicating a fairer distribution of income nationwide.
Amir Hamzah added that social mobility will be a key pillar under the 13th Malaysia Plan, with reforms aimed at creating new opportunities through education, TVET (technical and vocational education and training) and improved employment pathways.
He said while targeted cash assistance such as Sumbangan Tunai Rahmah and Sumbangan Asas Rahmah have helped ease the financial burden of vulnerable groups, long-term efforts will focus on empowering households to improve their own livelihoods.
"We are enhancing direct interventions, not only through financial assistance but by equipping people with the means to improve their quality of life and generate sustainable income," he said. |
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