Anwar unveils record budget, driven by civil service pay hike

Wage increase likely to boost spending, a key driver of growth this year

- Shannon Teoh

KUALA LUMPUR Prime Minister Anwar Ibrahim unveiled Malaysia's fifth consecutive record budget of RM421 billion (S$127.8 billion) on Oct 18, boosted by a RM13.5 billion increase largely driven by salary revision bonuses that will raise civil servant pay for the first time in over a decade.

But there was no increase in development expenditure as Datuk Seri Anwar, who is also Finance Minister, eschewed large-scale projects in favour of infrastructure to support public well-being and industrialisation.

"Now is not the time for mega projects," he told Parliament, citing instead the need for flood mitigation works and the Rapid Transit System linking Johor and Singapore by 2027, as well as water supply and road transport facilities.

Analysts believe the RM12 billion increase in income which the Premier claims is the highest ever - for 1.6 million government employees and 900,000 pensioners will likely translate into continued momentum for private consumption, a key driver of 2024's betterthan-expected economic growth so far.

The statutory minimum wage for the private sector will also be raised to RM1,700 monthly from RM1,500, with effect from February.

Private consumption makes up about three-fifths of gross domestic product (GDP).