2-5-2024 (KUALA LUMPUR) Prime Minister Anwar Ibrahim unveiled plans on May 1 to bolster salaries for civil servants in Malaysia by more than 13% starting from December, addressing concerns over escalating living costs, a depreciating ringgit, and proposed subsidy reforms.
Datuk Seri Anwar had previously outlined intentions to implement subsidy reductions and higher taxes in 2024, alongside redirecting financial assistance towards the most vulnerable segments of society. However, analysts have cautioned against potential inflationary pressures and increased fuel expenses resulting from these measures, especially amid declining exports and a slowdown in economic growth.
The salary hike, amounting to an allocation of RM10 billion (S$2.86 billion), was disclosed by Mr Anwar during a Labour Day event. He further stated that the government is in the final stages of crafting plans to ensure that civil servants receive a minimum monthly income exceeding RM2,000.
Malaysia’s government and central bank have projected a full-year economic growth rate of 4 to 5% for 2024, a slight improvement from the 3.7% recorded in the previous year but still below the exceptional 8.7% growth achieved in 2022, which marked a 22-year high.
Amidst economic uncertainties, the Malaysian ringgit has experienced a 3.9% depreciation against the US dollar in 2024, reaching a 26-year low in February. While authorities attribute much of the currency’s weakness to external factors, they anticipate a recovery in its performance throughout the year.
