Malaysia plans 13% salary hike for civil servants from December amid increasing prices

Malaysia will increase salaries for civil servants by more than 13 per cent from December, Prime Minister Anwar Ibrahim said on May 1, amid rising prices, a weak ringgit currency, and plans to make some changes in subsidies.

Datuk Seri Anwar had earlier pledged subsidy cuts and higher taxes in 2024, while re-directing financial aid to the people who need. Analysts have flagged threats of inflation and greater fuel costs from the planned cuts, amid falling exports and moderating development .

The salary rise will include an allocation of RM10 billion (S$2.86 billion), Mr Anwar told an event to mark Labour Day. The government was finalising plans to make sure civil servants a minimum monthly income of more than RM2,000, he added.

Malaysia’s government and central bank expect full-year economic development, of 4 to 5 per cent in 2024, up from 3.7 per cent in 2023, which was a sharp drop from a 22-year high of 8.7 per cent in 2022.

The ringgit has weakened 3.9 per cent in opposition to the the dollar in 2024, having fallen to a 26-year-old low in February. The government and central bank have attributed its weak performance prominently to external factors, saying they anticipate it to strengthen this year.