By Karina Imran & Nurul Jannah Kamaruddin
KUALA LUMPUR: Malaysians’ quality of living is set to improve following next month’s minimum wage rise and civil service salary adjustment.
The latest salary increase in the civil service is among efforts to ensure sufficient income for survival amid economic uncertainty and rising prices of necessary goods and services.
“Although this may seem small, its impact is crucial towards ensuring an affordable living standard.
“Name it Sumbangan Tunai Rahmah (STR) or Sumbangan Asas Rahmah (SARA). Both were given to ease the burden among the least fortunate group,” Universiti Malaysia Terengganu lecturer at the Faculty of Business, Economics and Social Development, Associate Professor Dr Roshaiza Taha told Bernama.
Malaysia’s monthly minimum wage will be raised to RM1,700 from RM1,500, effective Feb 1 this year.
Under the Public Service Remuneration System (SSPA), officers in the implementing, management and professional groups received a phased salary adjustment of 15 per cent – eight per cent in Phase One as of December last year, and seven per cent in Phase Two, starting January 2026.
The top management group received a salary adjustment of four per cent in Phase One and three per cent in Phase Two.
Civil service salaries were last revised 12 years ago. This latest bold move is in line with the effort to transform civil servants’ income which involves an allocation of up to RM10 billion.
It also demonstrates Malaysia’s financial position remains strong despite global financial turmoil.
Prime Minister Datuk Seri Anwar Ibrahim had, on many occasions, emphasised the importance of a stronger economic foundation to increase its resilience against the many ripple effects resulting from geopolitical uncertainties and other external factors.
Meanwhile, Universiti Malaysia senior lecturer in the Economics Department, Faculty of Business and Economics Dr Elya Nabila Abdul Bahri said the minimum wage rise and civil service salary adjustment will drive consumer purchasing power and aggregate consumption, which in turn, will bring about a multiplier effect to stimulate economic growth.
She is also confident that the SSPA salary structure has taken into consideration the inflation rate and the rise in the cost of living.
Malaysia’s cost of living resulting from inflation is lower than other Asean countries.
Its inflation rate at end-2024 hovered around 1.8 per cent, which was lower than Laos (18.32 per cent), Vietnam (2.94 per cent), and the Philippines (2.9 per cent).
She explained that wage increases came about due to factors coming together, for example, inflation and supply chain disruptions, which result in a rise in production costs such as labour, operating costs and raw material costs.
This drove the shift in the cost of prices of the final products.
“Therefore, the government has to control the price increase in every supply chain, and not just control the final product price,” she said.
Elya Nabila said although the world economy has recovered post-pandemic, prices of raw materials remain high due to dependence on imported raw materials and exchange rate uncertainties. – BERNAMA
