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.