Surging News reporter Nan Boyi
On May 1, Malaysian Prime Minister Datuk Seri Anwar Ibrahim said that in response to the rising cost of living and a weak currency, the salaries of civil servants in Malaysia will rise by more than 13% starting in December this year.
Malaysian Prime Minister Anwar Ibrahim Visual China data map
According to a report by Bloomberg on May 2, Anwar said in Kuala Lumpur on the 1st that he would allocate more than 10 billion ringgit (about 15.229 billion yuan) for the salary increase of government workers at all levels, which will be the largest salary increase for civil servants in the country's history. Anwar added that the minimum monthly income for civil servants will also increase from the current RM1,795 ($2,733.62) to more than RM2,000 ($3,045.82).
According to Lianhe Zaobao, the country's civil servants have not received another salary increase since a 13% increase 12 years ago. Malaysian government spokesman Fahmi Fahmi told the media that the details of the salary increase for the country's civil servants will be announced in the 2025 budget presented in October this year.
Mohd Azanizan, chief economist at Bank Muamalat, believes that the government's salary increase for civil servants will boost morale. "The government is also encouraging private companies to raise wages for their employees. This will drive consumer spending, which can even account for about 61% of gross domestic product (GDP).
Commenting on the salary increase, the president of the National Public and Civil Trades Union of Malaysia (CUEPACS) Anam Madam said that on behalf of the members, he thanked the Anwar government for raising the salaries of civil servants, but he still hoped that the government would consider raising the pensions of civil servants this year.
Malaysia has a population of 34 million and 1.6 million civil servants, which means that one in every 21 people in the country is a civil servant, making it one of the highest percentages of civil servants to population in the world.
The salaries and pensions of the huge civil service are a major expenditure item in the budget every year. At present, there are about 971,000 retired civil servants in the country, and about 32,000 more will be added every year. The pensions of these civil servants account for 10.7 per cent of the Government's annual administrative expenditure. In addition, according to the 2024 Budget, the salary of civil servants in Malaysia is 95.6 billion ringgit, accounting for 31.5% of the government's administrative expenditure. Therefore, the impact of this salary increase on the government's financial situation for civil servants has attracted much attention.
Malaysia's economy grew at its highest pace in a year between January and March, suggesting that the Southeast Asian country is experiencing a stronger recovery. However, the country's exchange rate continues to be near a 26-year low, resulting in more expensive imports.
There are concerns that Anwar's planned reforms to strengthen the country's fiscal position through more targeted aid and higher taxes could exacerbate price pressures. The government plans to cut petrol subsidies this year to narrow the budget deficit at a time when voters are grappling with the rising cost of living.
Dr Yiw Kim Loong, Vice President of the Malaysian Economic Association, said that the salary increase for civil servants was a reasonable measure taken by the government to help civil servants cope with inflation. With a gradual improvement in the financial situation, the government will be in a better position to raise the salaries of civil servants.
According to Bloomberg, Anwar made the announcement ahead of a by-election to be held in Malaysia's most populous state of Selangor on May 11, when there will be a fierce battle between Anwar's Pakatan Harapan and opposition candidates.
This issue is edited by Xing Tan