Aspirations Unfulfilled : Malaysia's Cost of Living Challenges
Despite Malaysia’s low and stable inflation rate, there has been an ongoing debate regarding perceived increases in the cost of living in the country. The concerns are frequently expressed in public policy discussions, the mass media, and private...
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| Format: | Report |
| Language: | English |
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World Bank, Malaysia
2020
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| Online Access: | http://documents.worldbank.org/curated/en/175101597160321052/Aspirations-Unfulfilled-Malaysias-Cost-of-Living-Challenges http://hdl.handle.net/10986/34331 |
| Summary: | Despite Malaysia’s low and stable
inflation rate, there has been an ongoing debate
regarding perceived increases in the cost of living in the
country. The concerns are frequently expressed in public
policy discussions, the mass media, and private
conversation. The issue has featured prominently in public
and private discourse for years, dating back at least to the
rationalization of the fuel subsidy in December 2014 and the
introduction of the Goods and Services Tax in April 2015.
More recently, there has been a robust public debate about
whether Malaysia should raise the nationally defined poverty
line. These concerns have emerged during a period of low
inflation; the average annual headline inflation rate stood
at less than 2 percent beginning in January 2015 and has
declined to less than 1 percent since January 2018, well
below the growth rates of the economy and average nominal
incomes. In this context, the “cost of living” is frequently
used as a catchall term that may reflect wider developments
in the economy and the associated impacts on household
budgets and well-being. While the discussion is usually
framed as an issue of the rising costs of goods and
services, the core issues for most Malaysians extend beyond
prices. These include lagging income growth and greater
indebtedness that results in less disposable income and
inadequate financial savings. In addition, rising home
prices also feed into the concerns of many Malaysians about
housing affordability and the cost of living. |
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