Malaysia: As Budget 2018 looms, people’s lives reflect cracks in economy

  • AZMAN Razak has a diploma in automotive engine repairs but the 23-year-old has not had a proper job since he graduated three years ago from a technical college.
  • Azman’s experience and that of other individuals The Malaysian Insight spoke to reflect the cracks in the Najib administration’s economic strategy as it prepares to table its latest budget on 27 Oct 17.
  • These flaws in the economy will challenge the government’s ability to deal with problems, such as high youth unemployment and inflation, through the budget. The administration had asked for feedback from Malaysians on what they wanted to see in the budget.
  • Market research firm Ipsos Malaysia conducted a study among 952 consumers in late Sep 17 on what they wanted the government to focus on in Budget 2018.
  • The study found that the top-most concern was the high cost of living at 55%. The second most pressing issue was the lack of affordable housing at 42% followed by tax reductions at 37% and economic growth at 26%.
  • The Malaysian Insight’s interviews with Malaysians and those who wrote on the prime minister’s website mirror these findings. But it also revealed how the government’s solutions to problems, such as youth unemployment and rising inflation, are being hobbled by its own policies.
  • The government said there are 1.7 million legal foreign workers in Malaysia. The administration has allowed export-oriented manufacturers to apply for a 100% foreign workforce.
  • The Ipsos report said the government’s own data showed that the consumer price index (CPI) rose 0.6% to 4.3% y/y in Sep 17, compared with 3.7% in Aug 17. Recently, the Malaysian Institute of Economic Research (MIER) described 2017 as the year of high prices which have hurt consumers’ purchasing power.

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