Malaysia's Disposable income rises nationwide to RM7,584

 

PUTRAJAYA: Malaysia’s average disposable household income rose by 3.2% to RM7,584 in 2024, according to the latest Household Income and Expenditure Survey (HIES) 2024 Report.

“In terms of disposable income, the average monthly disposable household income increased by 3.2% to RM7,584 in 2024, while the median rose 5.1% to RM5,999. This represents 82.8% of total gross household income, indicating households’ ability to meet essential expenditure needs,” the report stated.

The report also highlighted that this rise in disposable income was accompanied by a gradual improvement in income distribution.

“Households in the Bottom 40 (B40) group, comprising 3.28 million households, had income of up to RM5,858,” according to the report, which was released yesterday.  

The report comprises 33 official statistical publications, presenting comprehensive findings and analyses of the country’s socioeconomic landscape from the perspective of household income and expenditure.

It also noted that the median household income in Malaysia reached RM7,017 in 2024, growing by 5.1% annually, while the mean household income rose by 3.8% to RM9,155.

Income growth varied by state, reflecting diverse economic conditions, the report added.

Six states recorded median household incomes above the national level, with Kuala Lumpur at RM10,802, followed by Putrajaya (RM10,769), Selangor (RM10,726), Johor (RM7,712), Penang (RM7,386) and Labuan (RM7,383).

“Penang recorded the highest annual growth rate at 6.4% between 2022 and 2024,” the report stated.

The report also noted that the B40 group’s share of total national income rose slightly to 16.7%, up from 16.3% in 2022.

In contrast, the Top 20% (T20), who earned RM12,680 and above per month, saw their share decline to 45.1%, down from 46.3%. The Middle 40% (M40), earning between RM5,860 and RM12,679, made up a significant portion of the remaining income share.

At the event, Economy Minister Datuk Seri Amir Hamzah Azizan described HIES in his keynote address as a vital statistical instrument for measuring progress and improving the socio-economic status of Malaysian households.

“It is one of the main sources for shaping the country’s socio-economic and social policies, including poverty eradication programmes, increasing income, reducing income inequality, and addressing the cost of living,” he explained.

Amir Hamzah added that Malaysia has achieved a major milestone, with hardcore poverty nearly eradicated and reduced to just 0.09%.

“This reflects the effectiveness of various initiatives to increase people’s income, empower urban communities economically, and enhance public well-being, all of which will be continued by the government,” he said.

The Gini coefficient improved to 0.390 in 2024, compared to 0.404 in 2022, signalling a narrowing of income inequality.

The national absolute poverty incidence decreased from 6.2% in 2022 to 5.1% in 2024, representing about 416,000 households.

“Poverty in urban areas declined to 3.7%, while poverty in rural areas improved to 12%,” the report noted.

“The hardcore poverty incidence dropped to 0.09%, equivalent to fewer than 8,000 households earning below the Food Poverty Line Income (PLI),” it added

Experts: Rising cost of living dampens income gains

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 — According to the Statistics Department (DOSM), the average monthly disposable household income increased by 3.2% to RM7,584 in 2024, while the .

All routes lead to China

 

After a US$1 trillion investment, the e has evolved into a global infrastructure and economic strategy involving more than 150 countries.

Two months ago, China inaugurated a new train service that adopts a sea-road-rail intermodal approach, reducing the transit time to about 18 days for about 4,300km – more than a 50% increase in efficiency – and notably avoids passing through the Strait of Malacca.

Its full name, the “Zheng He” Sea-road-rail International Multimodal Transport Service, departs from Kunming, carrying 26 containers of Yunnan specialities, including vegetables, fertilisers and animal feed. It then traverses the China-laos Railway to Vientiane, Laos, and then divides into three routes to complete the transportation.

Route one transfers to the Thai railway network to reach Changwat Saraburi in Thailand, route two connects to road transport to Laem Chabang Port in Thailand, followed by sea freight to Singapore.

And route three connects to road transport to Ranong Port in Thailand, then by sea to Yangon Port in Myanmar, and thence by sea to Chittagong Port in Bangladesh.

Named after the renowned navigator Zheng He, a favourite son of Kunming, this amazing feat of engineering has opened up goods from the mainland and Yunnan specifically to new markets, saving costs and resources.

One of these new markets could potentially be Malaysia.

With China being Asean’s largest trading partner, Malaysia’s geographical position makes it a crucial node for the Maritime Silk Road, with its ports and infrastructure playing a pivotal role in regional connectivity and trade.

A key BRI initiative is the East Coast Rail Link (ECRL), a massive infrastructure project connecting the east and west coasts of the peninsula with 20 stations along its route.

Construction work for the 665km railway project has reached 86% completion as of July, despite several hiccups and challenges throughout its development and implementation phases. It is expected to be completed by the end of 2026.

Aimed at improving connectivity and stimulating economic development, the project traversing Kelantan, Terengganu, Pahang and Selangor is set to be an economic game changer, especially in boosting Malaysia’s transportation network.

Travel time between Kota Baru and the Klang Valley is anticipated to be around four hours, compared to seven hours or more by road during festive seasons.

In March, Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the ECRL will serve as a catalyst for socioeconomic growth and is expected to increase the country’s GDP by 3.78% by 2047. - 

In April, the Malaysian Investment Development Authority said the ECRL is anticipated to generate RM1.4 trillion for Malaysia’s economy by 2047 with a focus on industrial parks, logistics hubs and transit-oriented developments.

The numbers quoted are impressive, but for the ECRL to truly be effective, there must be a further rail connection with the Thai rail network.

There has been talk of extending the ECRL from Kota Baru to the Sungai Golok border in Thailand to create a seamless connection. This in turn can ensure a transfer of goods from Yunnan and vice versa.

While talks are ongoing between the Thai and Malaysian governments, there are obstacles in the way. Flood risks in the low lying Rantau Panjang stretch is a worry, as is track compatibility because the ECRL uses a standard gauge (1.435m wide), while the State Railway of Thailand uses a 1m gauge.

Technical issues aside, there is political consensus to see the connection happen and it would stimulate trade between the two countries.

As the BRI evolves, it is prompting discussion and debate as to its optimal scale, design, benefits and impact. What cannot be denied is that this initiative continues to be a significant geopolitical force, with its influence on regional and global development being recognised worldwide.

This is no longer a speculative blueprint; it is the largest modern infrastructure initiative in human history. - by ),Brian Martin,

The evolution of Malaysian foreign policy

Kuala Lumpur once prized non-alignment above all else – now it sees Beijing as more reliable than lectures from the West.- Murni Abdul Hamid

Malaysian Prime Minister Anwar Ibrahim during a parade for Malaysian Independence Day celebrations last month in Putrajaya, Malaysia (Syaiful Redzuan/Anadolu via Getty Images

Malaysia’s approach in navigating great power rivalry since the Cold War has largely been based on the principles of non-alignment, neutralism, and equidistance. However, two contrasting snapshots of the country’s Independence (Merdeka) Day celebration – half a century apart – offer an interesting perspective on whether Malaysia’s contemporary position has shifted away from these principles.

On 31 August 1973, Malaysia’s second Prime Minister, Tun Abdul Razak, hastily left the joyous Merdeka celebration midway to depart for Algiers and lead the Malaysian delegation to the Non-Alignment Movement (NAM) Summit. It was his first time attending the summit. It had taken several attempts for Malaysia to become a NAM member, largely due to Indonesia’s opposition and influence within the Afro-Asian group during the Konfrontasi period. Malaysia’s experience of Konfrontasi and the retreat of the British from the region pushed the country to seek friends among other newly independent states.

When Malaysia finally became a NAM member in 1970, its foreign policy gradually shifted away from heavy reliance on the United Kingdom toward a more neutral and non-aligned stance. Against this background, Tun Razak strongly felt the need for Malaysia to be represented at the highest level in Algiers to signify the country’s commitment to non-alignment – even if it meant leaving the Merdeka celebration halfway.

Malaysia’s second Prime Minister, Tun Abdul Razak (Bettmann/Getty Images)

Jump forward just over 50 years to 31 August 2025, Malaysia’s tenth Prime Minister, Anwar Ibrahim, left at the conclusion of the nation’s Merdeka celebration to immediately depart for China to attend the Shanghai Cooperation Organisation (SCO) Summit. It was the first time Malaysia had participated in the SCO, in which Malaysia is neither a member nor an observer. It was also the first time a Malaysian leader attended China’s “Victory Parade” in Beijing, which this year took place a few days later, to commemorate the end of the Second World War, alongside other leaders including from Russia, North Korea, Indonesia, Vietnam, Laos, Cambodia, Myanmar, and Iran.

Since becoming Prime Minister in late 2022, Anwar has visited China four times, with China’s President and Premier reciprocating accordingly (also a total of four times if including the upcoming ASEAN Summit and other meetings next month).

While China has been Malaysia’s largest trading partner since 2009, relations with China have further intensified in recent years both bilaterally and multilaterally. These include Malaysia’s active involvement in the Belt and Road Initiative (BRI), and participation in the Regional Comprehensive Economic Partnership Agreement (RCEP). Stronger ties also extend to decisions to allow Chinese companies to develop the country’s second 5G network and to revitalise Malaysia’s national car industry, the recent acceptance of China’s vision of building a Community with a Shared Future for Mankind, and the landmark creation of a bilateral mechanism with China to discuss maritime issues. Malaysia’s decision to join BRICS, and the initiative to bring in China into the ASEAN-GCC platform by hosting the first-ever ASEAN-GCC-China Summit in Kuala Lumpur, also illustrate the depth of relations.

The actions of the great powers leave little room for Malaysia to manoeuvre, and siding with the more predictable and reliable power seems to be the less risky option.

While Malaysia’s intensification of cooperation with China should not be viewed as a zero-sum game, it is hard to ignore that this occurred against the backdrop of deteriorating relations with the United States. From the perspective of Malaysian leaders, the more benign power and trusted partner today is not the United States, but China. This, in spite of several challenges, particularly in the South China Sea.

In Anwar’s speech during President Xi Jinping’s visit to Malaysia earlier this year, he praised China as a rational, steady, and reliable partner amid the turbulence of “economic tribalism” and threats to multilateralism and the rules-based order. Last year, when Anwar spoke off-the-cuff at a business luncheon in honour of Premier Li Qiang in Kuala Lumpur, he commended the attitude of the Chinese leadership as “friendly, courteous, full of respect, [and] understanding of cultures and differences”, in contrast to the “narrative from the others” and the “barrage of questions” from others – especially “the western” – on whether Malaysia’s close relations with China would be in Malaysia’s best interest.

Understandably, as an independent nation, no country appreciates being told who it should be friends with, especially when those doing the lecturing neither act as they preach nor have been reliable friends in the first place.

While closer relations with the United States would still serve Malaysia’s interests – particularly in the realms of the economy and defence – they are proving even more elusive under President Donald Trump. His arbitrary tariff impositions, aggressive rhetoric (even against allies), withdrawals from multilateral organisations, disregard for the rule of law, undermining of the global order, and coddling of Israel have been obstacles for Malaysian leaders in promoting closer ties with the United States. Domestically, various opinion polls in recent years have shown a steady decline in Malaysians’ favourable perceptions towards the United States, while favourable views of China and even Russia have increased significantly.

If the above trend persists, Malaysia might find itself moving even further away from its non-aligned, neutral, and equidistant stances that served it well in the past. At present, however, the actions of the great powers leave little room for Malaysia to manoeuvre, and siding with the more predictable and reliable power seems to be the less risky option.

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Susannah Patton20h ago

Is the US really losing to
China in Southeast Asia?

A major new research project published by the Lowy Institute says yes – but there’s more to the story

China achieves key digital breakthroughs in 14th Five-Year Plan, ranks global second in computing power: official

 

AI Photo: VCG

China has made remarkable strides in digital infrastructure and technological innovation during the 14th Five-Year Plan period (2021-25) with its total computing power ranking second worldwide and technology breakthroughs in key digital sectors, Liu Liehong, head of the National Data Administration (NDA), told a press conference on Thursday.

In terms of digital infrastructure, by the end of June, the country had 4.55 million 5G base stations and 226 million gigabit broadband users, with its total computing power ranking second worldwide. These advancements have strongly driven economic and social development, Liu said.

Technological breakthroughs also shine in key digital sectors. The integrated circuit industry has formed a complete industrial chain covering design, manufacturing, packaging, testing, equipment and materials. Domestic operating systems are thriving, with China's self-developed HarmonyOS powering over 1.19 billion devices across over 1,200 product categories like smartphones, cars and home appliances. China's overall AI strength has seen systemic growth, holding 60 percent of global AI patents, according to the NDA.

The data industry has emerged as a new growth driver. In 2024, the number of data enterprises in China exceeded 400,000, and the scale of the data industry reached 5.86 trillion yuan ($817.24 billion), an increase of 117 percent compared with the end of the 13th Five-Year Plan period (2016-20). Digital economy growth has also created over 100 new occupations, generating fresh employment opportunities, according to the NDA.

By the end of 2024, China's software revenue had grown by 80 percent compared with 2020, while the added value of above-scale electronic information manufacturing had increased by over 70 percent. Meanwhile, intelligent transformation and digital upgrading are advancing at an accelerated pace. More than 10,000 smart factories have been established, covering over 80 percent of major manufacturing industry categories. Smart home appliances and smart wearables have emerged as new consumption trends. -  Global Times

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US national debt hits record $37 trillion amid mounting fiscal concerns

Photo taken on March 17, 2020 shows U.S. dollar banknotes in Washington, DC, the United States. Photo:XinhuaThe US government's gross national debt has surpassed $37 trillion, a record number that highlights the accelerating debt on America's balance sheet and increased cost pressures on taxpayers, the AP reported. The $37 trillion update is found in the latest Treasury Department report issued on Tuesday, which logs the nation's daily finances, according to the AP report.

Experts said that as the debt scale grows larger, future interest payment costs will continue to rise, posing risks to fiscal sustainability, while global investors may grow wary of US Treasury bonds amid credit downgrades and uncertainty.

The $37 trillion debt milestone comes less than eight months after the nation hit the $36 trillion threshold for the first time in late November 2024, and a little over one year after the $35 trillion mark was reached in late July 2024, Fox Business reported.

The $37 trillion debt amounts to about $280,000 per household or $108,000 per person, according to the Peter G. Peterson Foundation.
 
The national debt soaring past $37 trillion sends yet another clear message about America's unsustainable fiscal path, Chair and CEO of the Peter G. Peterson Foundation Michael Peterson said in a statement on its website.

"Our growing debt slowly damages our economy and the prospects of the next generation. As the government borrows trillion after trillion, it puts upward pressure on interest rates, adding costs for everyone and reducing private sector investment. Within the federal budget, the debt crowds out important priorities and creates a damaging cycle of more borrowing, more interest costs, and even more borrowing," Peterson said.
 
The Government Accountability Office outlines some of the impacts of rising government debt on Americans — including higher borrowing costs for things like mortgages and cars, lower wages from businesses having less money available to invest, and more expensive goods and services, according to the AP.
 
The Joint Economic Committee estimates at the current average daily rate of growth, an increase of another trillion dollars in the debt would be reached in approximately 173 days, according to the AP.

Peterson warned that "As our debt continues to rise, at some point the financial markets will lose confidence in our ability to overcome the politics to solve this problem."
 
To repay maturing debt, the US government has been issuing new debts to repay old ones, leading to the continuous expansion of the overall debt load. As the debt scale grows larger, it means that the future interest payment costs will continue to rise, posing risks to fiscal sustainability, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Wednesday.

If maturing debts cannot be repaid, US debt will become unsustainable, and its credit ratings may be downgraded, creating significant risks for global investors, Zhou added.

The expansion of the US government's debt scale has brought more uncertain risks to investments in US Treasury bonds, making global investors more cautious, Zhou said.

"Factors such as rating agencies' changes in sovereign credit ratings and sharp swings in US tariff policies at the real-economy level have added to this uncertainty," Zhou added.

Yang Changjiang, a professor at Fudan University, told the Global Times on Wednesday that the expanding US government debt has also brought greater uncertainty to the global financial market and the stable operation of the international monetary system.

In May, Moody's downgraded the US sovereign credit rating. It is expected that US large-scale fiscal deficits will further increase the burden of government debt and interest payments, and the fiscal situation is likely to deteriorate, Yang said.

Moody's Ratings in May cut the US' sovereign credit rating by one notch to Aa1 from Aaa.

"This one-notch downgrade on our 21-notch rating scale reflects the increase over more than a decade in government debt and interest payment ratios to levels that are significantly higher than similarly rated sovereigns," said a release by Moody's Ratings. 

The US fiscal performance is likely to deteriorate relative to its own past and compared with other highly rated sovereigns, according to the credit rating agency.

The downgrade means the US has lost its last triple-A credit rating from a major ratings firm, following cuts by Fitch Ratings in 2023 and S&P Global Ratings in 2011, according to Xinhua.Related:

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Growth expected as ‘stars aligning’ for country

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Bursa Malaysia chairman Tan Sri Abdul Wahid Omar

 KUALA LUMPUR: Malaysia is in a “sweet spot” for economic growth and investment, with the “stars aligning” in its favour, according to industry leaders and market analysts.

This optimism stems from the country’s robust macroeconomic fundamentals, improving investment climate and strategic positioning in the global supply chain.

Maybank Investment Bank head of regional equity research Anand Pathmakanthan highlighted Malaysia’s acceleration in gross fixed capital formation, driven by a blend of domestic direct investment (DDI) and foreign direct investment (FDI).

“The good news is it’s not just FDI, it’s also DDI, which is far more important in terms of job creation and tax generation,” he said during his presentation at the Institute of Chartered Accountants in England and Wales Economy Insight Conference 2024 yesterday.

Anand said for the last 10 years, local companies have not been investing, which has a lot to do with political instability.

“They’ve been investing less and less in Malaysia, which is always a bad sign for any country,” he said.

But in the last two years, he said Malaysia is seeing a recovery in DDI.

“The recovery in DDI reflects the confidence that domestic businesses are feeling better about the environment. That (DDI) is going to be a key support when issues about trade crop up next year with Trump 2.0,” he said.

Meanwhile, Anand said Budget 2025 is “very well-balanced,” emphasising initiatives to crowd-in private sector investments.

He projected continued economic growth, supported by a civil service pay hike, minimum wage increases and enhanced cash handouts, which would sustain domestic consumption in 2025.

“Malaysia is in a very sweet spot, especially when it comes to attracting supply chain relocation and FDI,” he said.

Anand projected Malaysia’s gross domestic product (GDP) to conclude at 5.2% in 2024 and 4.9% in 2025, outpacing the Asean-6 regional average of 4.8% in 2024 and 4.7% in 2025.

Affin Bank Bhd president and chief executive officer Datuk Wan Razly Abdullah echoed the optimism, projecting GDP growth of 5.2% in 2025, up from the bank’s projection of 5% for this year.

He attributed this to stable oil prices, elevated crude palm oil (CPO) prices and active construction and technology sectors.

“The elevated price of oil and CPO will provide good income streams,” he said, adding that Johor and Klang Valley developments would boost the property sector.

“The stars are aligning for Malaysia thanks to our stable political environment and strong FDI flows.”

Wan Razly also expressed bullishness on the ringgit, predicting it to strengthen to RM4.10 against the US dollar by end-2025, supported by the US Federal Reserve interest rate cuts.

Adding to the optimism for Malaysia’s economic prospects, Bursa Malaysia chairman Tan Sri Abdul Wahid Omar highlighted the robust performance of the local bourse, driven by a favourable investment environment and strong macroeconomic fundamentals.

“Malaysia has been a vibrant market for initial public offerings (IPOs) this year. Up to the end of November, we had 47 listings that raised a total of US$1.5bil. By year-end, we expect to close with 54 or 55 listings,” he said.

He noted that the average daily trading value for 2024 has increased by over 50% year-to-date, reaching approximately RM3.1bil.

Abdul Wahid believes this momentum will be sustained into 2025, with 19 IPO approvals in hand for next year.

“Looking at the pipeline, I think 2025 should be another good year,” he said.

He said “the overall good macroeconomics are being translated into the real world and capital markets,” coupled with a shorter processing time for IPO listings of just three months.

Separately, Abdul Wahid said Malaysia should further tap into the Asean market and leverage its strategic advantages, as the regional bloc is well-positioned amidst global uncertainties, particularly ahead of the United States’ tariff threats on China.

Abdul Wahid urged Malaysia to continue to pursue its relationship with Asean in a pragmatic and constructive manner to further capitalise on the bloc’s 670 million consumers.

“The biggest potential that we have is in Asean. Our trade and investments (in the bloc) is relatively low compared to other trade partners and that can be enhanced further,” he said.

Abdul Wahid also emphasised that Malaysia should not be mutually exclusive to any specific trade groupings, trade talks or bilateral agreements and should focus on further strengthening trade relationships.

In the realm of inflation, both Anand and Wan Razly anticipate a rise to 3% in 2025, up from the current 1.9%, mainly due to the targeted petrol subsidy scheduled to take effect mid next year.

Despite the projected uptick, both of them said Malaysia’s inflation rate will stay within a healthy range, underpinned by strong macroeconomic fundamentals and effective policy measures.

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