Malaysian Prime Minister Anwar Ibrahim has announced a record hike in civil servants’ pay of more than 13 percent, amid rising prices and a weakening local currency.
In a speech to mark Labour Day on Wednesday, Anwar said 10 billion ringgit ($2.10bn) would be allocated to support the “best increase in history” from December.
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end of listAnwar, who is also finance minister, said the salary hike would ensure that civil servants earn a minimum income of 2,000 ringgit ($420) per month.
“Currently the overall minimum income, which includes salary and fixed allowances, is 1,795RM per month,” Anwar was quoted as saying by state-run news agency Bernama.
Anwar also called on companies making “huge profits” to share their gains by raising wages for their employees.
The Malaysian leader, who last year flagged plans to increase taxes and cut subsidies to shore up the country’s finances, made the announcement as a decline in the value of the ringgit puts pressure on household budgets.
The ringgit has lost nearly 4 percent of its value against the US dollar so far this year.
In February, the currency slumped to a 26-year low, dropping to 4.7965 ringgit per dollar, lower than at any point since the 1998 Asian financial crisis.
While helping exporters to sell their products more cheaply overseas, the currency’s slide has raised the cost of essential imports, including food and fuel.
Anwar has described the currency’s slide as “concerning” but “under control.”
Southeast Asia’s fifth-largest economy grew 3.7 percent last year, below government projections and sharply down from a 22-year high of 8.7 percent in 2022.
Gross domestic product (GDP) expanded an estimated 3.9 percent in the first quarter of this year, according to advance estimates released by the country’s statistics agency.
Malaysia’s central bank has said it expects GDP growth of 4-5 percent in 2024.
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