The World Bank released a scathing report that young Malaysians were debt-ridden and struggling to survive as income growth rate for lower income workers are stalled and not keeping pace with inflation.
According to the World Bank, 27 percent of single adults in Kuala Lumpur earn less than $650 — the central bank’s estimated livable wage in the capital city.
“As of 2018, nearly 30 percent of Malaysians felt that they did not have enough money for food and 23 percent reported having inadequate money for shelter,” stated the World Bank’s 21st edition of its Malaysia Economic Monitor.
The World Bank’s analysis found widespread dissatisfaction among those living in urban and rural areas. Respondents stating that they didn’t have enough money to cover food and shelter expenses doubled and tripled respectively.
“The cost of living is a concern which extends beyond prices. Those on lower wages spend their income to pay for essentials – rent, transportation, food – and in the end, they find not much is left for the month,” stated YB Datuk Seri Saifuddin Nasution Ismail, Malaysia’s Minister of Domestic Trade and Consumer Affairs in a World Bank report.
The ramifications of the US-China trade war has exacerbated the condition of Malaysians by slowing growth and wage increases, according to Bank Negara Malaysia (BNM).
The US-China trade war continued to weigh down growth in Malaysia’s retail and automobile sector, along with logistics and transport sub-sectors — all major employers of young and lower-income Malaysians.
“More than ever, we need to scale up investments in people to encourage sustainable, inclusive economic growth. Malaysia can make policy decisions to combat inequality and improve the lives and opportunities of the poorest,” said Mara Warwick, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand in the report.
Malaysia’s economic growth declined slightly from 4.9 percent GDP expansion in the second quarter to 4.4 percent in the third quarter.
“Growth in the Malaysian economy moderated to 4.4 percent in the third quarter of 2019 (2Q 2019: 4.9 percent), primarily attributed to lower growth in key sectors and a decline in the mining and construction activities,” stated BNM in the quarterly report. “On the demand side, most domestic demand components and net exports registered slower growth momentum.”