Salary reforms can ease inflation, living expenses – BNM
Kuala Lumpur (named) – Bank Negara Malaysia (BNM) said that controlling inflation alone is not enough to reduce living costs, but the need for urgent pressure for structural reforms in handling unproven wage growth and ensuring income is in line with price increases.
Deputy Governor Datuk Marzunisham Omar said that although overall inflation had fallen significantly due to tightening on time monetary policy, the price level remained high, thereby reducing the purchasing power of households in the midst of moderate salary growth.
“From the first quarter of 2020 (S1 2020) to the first quarter of 2025 (S1 2025), the Consumer Price Index (CPI) increased cumulatively by 9.8 percent, while food and beverage prices rose higher by 17.5 percent.
“On the other hand, the nominal salary of the private sector for each employee only increased 7.9 percent in the same period … So, in real terms, the salary per employee decreased by 1.9 percent, so that is why we feel the pressure from the increase in living costs,” he said.
Marzunisham said this was during the panel session on the topic ‘sidewalk inflation, reducing costs: Policy Perspective’ at the Sasana 2025 Symposium organized by BNM today.
He stressed that while salaries must be reflected in productivity, data from the first quarter of 2022 to the second quarter of 2025 showed that the productivity of each employee increased 7.4 percent, the actual salary declined during the same period.
“This clearly reflects, especially at the micro level, structural inconsistency between increasing productivity and salary growth,” he said.
Meanwhile, he said Malaysia must focus on creating a higher and high -skilled job.
This is where investment plays an important and attractive role in the right type of investment is important in creating high -skilled jobs that lead to high income.
He stressed that Malaysia recorded a very encouraging amount of investment agreement in 2023 and 2024, and the percentage of high -skilled jobs in the economy increased to around 30 percent, up from 25 percent a few years ago.
Marzunisham said that attention must also be given to the supply aspect, where policy intervention is needed, expressing the ongoing concerns of entrepreneurs about the quality of graduates entering the labor market.
“Between 2022 and 2023, around 260,000 new graduates entered the job market. However, only around 150,000 high -skilled jobs were created every year during that period, producing a distance of nearly 100,000.
“That is why we see unemployment among permanent graduates around 36 percent of our graduates who work in medium or low jobs, just because they cannot get high -skilled jobs,” he said.
In addition, he said entrepreneurs complained that they could not find the right skilled workers, who emphasized the need to improve training and overcome the inability of skills among new graduates.
Marzunisham also emphasized that some countries have introduced different minimum wage levels, where the minimum wage is determined in accordance with the level of skills, adding other important fields of focus is the comprehensive ecosystem that determines how the salary is determined.
“Cooperation and management between employers, workers and government unions, for example, are important for all parties, all of these participants are directly involved in determining how salaries must be raised in this country, and not just to market strength,” he said.
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Post -salary updates can ease inflationary pressure, living expenses – BNM first appeared in Siakap Keli.
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