Malaysia’s Anwar announces record public salary hike amid weak ringgit | Business and Economy

Malaysian Prime Minister Anwar Ibrahim said a wage increase of more than 13% would be the “highest wage increase in history.”

Malaysian Prime Minister Anwar Ibrahim announced a record hike in civil servant salaries by more than 13% against the backdrop of rising prices and a weak local currency.

In his Labor Day speech on Wednesday, Anwar said 10 billion ringgit ($2.1 billion) would be allocated to support the “biggest increase in history” from December.

Anwar, who is also finance minister, said the salary hike would ensure a minimum monthly income of 2,000 ringgit (about 42,000 yen) for civil servants.

“The overall minimum income, including salary and fixed allowances, is currently RM1,795 per month,” Anwar said, according to a report by state news agency Bernama.

Mr. Anwar also called on companies making “huge profits” to share in the profits by increasing wages for their workers.

Malaysia’s leaders last year signaled plans to increase taxes and cut subsidies to shore up the country’s finances, but the announcement came as a fall in the value of the ringgit weighed on household budgets.

The ringgit has lost nearly 4% of its value against the US dollar so far this year.

In February, the currency fell to its lowest level in 26 years, dropping to 4.7965 ringgit to the dollar, the weakest point since the 1998 Asian financial crisis.

While exporters have been able to sell their products more cheaply abroad, currency depreciation has increased the cost of importing essentials such as food and fuel.

Mr Anwar said the currency depreciation was “concerning” but “under control”.

Southeast Asia’s fifth-largest economy grew by 3.7% last year, lower than government expectations and significantly lower than the 22-year high of 8.7% in 2022.

According to preliminary estimates released by the country’s statistics agency, gross domestic product (GDP) expanded by an estimated 3.9% in the first quarter of this year.

Malaysia’s central bank has forecast that gross domestic product (GDP) growth will be between 4% and 5% in 2024.

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