On May 1, Malaysian Prime Minister Anwar said that in response to the rising cost of living and a weak currency,LottobingoStarting from December this year, the salaries of Malaysian civil servants will rise by more than 13%.
According to Bloomberg, Anwar said in Kuala Lumpur on the 1st that it would allocate more than 10 billion ringgit.LottobingoThe salary increase for government staff at all levels will be the largest in the country's history. Anwar added that the minimum monthly income for civil servants will also increase from the current 1795 ringgit (2733.62 yuan) to more than 2000 ringgit (3045.82 yuan).
According to Lianhe Zaobao, the country's civil servants have not had a pay rise since a 13% pay rise 12 years ago. Malaysian government spokesman Fami told the media that details of the pay increase for the country's civil servants will be announced in the 2025 budget to be submitted in October this year.
Mohamer Azanizan, chief economist of the Muslim Social obligation Bank of Malaysia (Bank Muamalat), believes that the government's pay rise for civil servants will boost morale. "the government also encourages private companies to raise wages for their employees. This will drive consumer spending, which could even account for about 61 per cent of GDP.
On the news of the pay increase, Anamo, chairman of the National Public and Civil Trade Union (CUEPACS) of Malaysia, said that on behalf of his members, he thanked the Anwar government for raising the salaries of civil servants, but he still hoped that the government would consider raising civil service pensions this year.
Malaysia has a population of 34 million, with 1.6 million civil servants, which means that one out of every 21 people in the country is a civil servant, one of the countries with the highest percentage of civil servants and population in the world.
The salaries and pensions of a large civil service are major expenditure items in the Budget every year. At present, the country has about 971000 retired civil servants, and the number will increase by about 32000 a year. The pensions of these civil servants account for 10.7% of the government's annual administrative expenses. In addition, according to the 2024 budget, the salary of Malaysian civil servants is 95.6 billion ringgit, accounting for 31.5% of the government's administrative expenses. Therefore, much attention has been paid to the impact of the civil service pay increase on the financial situation of the Government.
Malaysia's economy grew at its fastest pace in a year between January and March, suggesting the Southeast Asian country is experiencing a stronger recovery. However, the country's exchange rate continues to be near a 26-year low, making imports more expensive.
There are concerns that Mr Anwar's plans to strengthen reforms to the country's fiscal position through more targeted aid and higher taxes could exacerbate price pressures. The government plans to cut gasoline subsidies this year to reduce the budget deficit at a time when voters are grappling with the rising cost of living.
Dr Yao Jinlong, Vice President of the Malaysia Economic Association, said that a pay rise for civil servants was a reasonable measure for the government to help civil servants cope with inflation. With the gradual improvement in the financial situation, the Government will be in a better position to give civil servants a pay rise.
Bloomberg reported that Anwar announced the news ahead of a by-election in Malaysia's most populous state of Selangor on May 11, when there will be a fierce competition between Anwar's Hope Alliance and opposition candidates.