Page 4 - Berita Sunway - Issue 67

ON THE COVER

RISING PRICES,

TIGHTER MEASURES?

The persistent high cost of living remains a common threat among
Malaysians, an issue policy makers and economists have struggled to solve

INSUFFICIENT INCOME GROWTH

Twenty-three year old Ch’ng Zhu Lin is feeling the pinch The World Bank report found that when it comes to making
from the rising cost of living. The finance executive from Sunway ends meet, Malaysians faced four issues — consumer price
Property Finance in Sunway Iskandar spends most of his income inflation, insufficient income, poor financial well-being and
(RM2,600) on monthly expenditure. shortage of affordable housing.
BERITA SUNWAY | JAN—MAR 2020
Rent constitutes a third of his income (RM1,100) while other “Prices have to be raised, but at levels that are relative to
major expenses include food and groceries (RM900), medical and the quality increase and value of the product or service to the
personal accident insurance (RM300), utilities (RM120), transport consumer. It has to be in line with income increases,” said Yeah
(RM80) and miscellaneous items such as household items, Kim Leng, Sunway University Business School Professor of
subscriptions, social activities and haircuts (RM100). Economics and Economic Studies Programme Director at the
“Housing is unaffordable and renting is currently the only Jeffrey Cheah Institute on Southeast Asia. Yeah is also a member
option that makes sense. I’m aware that there are cheaper rental of Bank Negara’s monetary policy committee.
rates being offered, however they are either with unsuitable While there may be average wage increases, Yeah noted that
living conditions or are located so far away that I would have to a big segment of the working population are not entitled to wage
purchase a vehicle to travel for work,” he said. increases, such as minimum wage earners, who currently earn
To adapt to the rising cost of living, Ch’ng has resorted to RM1,100 per month.
taking cold showers to save electricity and water, walks more “With stagnant wages and inflation rising by 1% to 2%, you are
often to cut reliance on public transport and buys household unable to cope with price increases because your wage increase
items in bulk during sales and promotions. is actually lower than the average increase in price of basket of
Ch’ng is just one of the many Malaysians struggling with the goods and services consumed by a household, or Consumer Price
rising cost of living in the country. Figures by the Gallup World Index (CPI),” he said.
Poll cited by the World Bank’s latest Malaysia Economic Monitor According to the World Bank report, while median incomes
report, ‘Making Ends Meet’ (MEM), showed that three in 10 outpaced inflation, income growth rates for low-income
Malaysians felt that they did not have enough money to put food Malaysians slowed between 2014 and 2016, with wage growth for
on the table, while one in five believed that they had insufficient younger and less educated workers trailing the earnings of older
funds for housing, as of 2018. and better educated workers. The report showed that median
According to the report, the number of Malaysians who felt employment income for younger workers aged between 20 and 29
financially strapped has doubled since 2012, particularly among grew at an annual rate of 2.4%, compared to 3.9% for those aged
urban dwellers, where poll results more than tripled from 8.6% 40 to 49 over the same period.
to 28.7% in 2018. When incomes cannot keep up with the rising costs of living,
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Malaysians, particularly the B40 group, are unable to save money.