Household income has always been a topic of interest. We often compare our income and expenses with our peers to find out if we are progressing at sufficient rate or managing our finances well.
Khazanah Research Institute (KRI) recently published the State of Households report, tracking household income distribution and expenditures in Malaysia in the past few years. From the report, there were several findings that you may find interesting.
#1 Average Household Income Grew In Malaysia
Average household income in Malaysia increased to RM5,620 in 2022 from RM5,452 in 2019. Although household income in 2022 recorded an increase, it fell short of the projected average household income of RM7,519. This means that average household income was growing at a much lower rate compared to previous years.
The report also unveiled that income growth in states in Malaysia were significantly contrasted, with Selangor recording the highest average income growth of RM409. Meanwhile, states and territories like Kuala Lumpur and Putrajaya experienced significant decline in household income at RM241 and RM118 respectively.
#2 More Malaysian Households In Poverty
Fresh out of a global pandemic in 2022, Malaysians households in both urban and rural areas were struggling financially.
The number of households in poverty increased significantly in 2022, with 6.2% of households in Malaysia being in absolute poverty. According to KRI’s report, several districts in Malaysia including Kuala Lumpur, Kuala Muda and Kota Kinabalu experienced increases of more than 1,000 to 5,000 in the number of households in poverty.
It is also highlighted that lower income households with average income of RM2,000 and below were impacted the most financially, with a staggering 100% income drop.
On the contrary, higher income households with an average income of RM12,000 and above experienced income growth of 2.0% to 6.6%.
#3 Slight Increase In Household Expenditures
Average expenditures in Malaysian households increased to RM3,797 in 2022 from RM3,393 in 2019.
Some of the biggest expenses in Malaysian households included housing and utilities at 23.2%, followed by food at 16.3% and transport at 11.3%.
Notably, there had been a significant increase in spendings on outside food and utilities probably due to the rising trend of work from home. Meanwhile, transport expenses were on the downward trend as more people could be working from home and going out less.
There was also a sharp rise in spending on communication services. During a time where lockdowns were implemented, digital platforms were essential for keeping in contact with others.
#4 Households Were Spending More On Health Expenses
In 2022, Malaysian households were spending significantly more on health-related items and services.
Specifically, districts in Selangor, Sabah, Sarawak, Johor, Malacca, Pahang, Penang and Kedah experienced the highest growth in healthcare expenses. Health insurance subscriptions also grew by 400% in 2022 compared to in 2019.
Besides, spendings on health-related expenses varied among different income groups. The report found that healthcare spending for lower income groups grew significantly faster during the pandemic, having posed more burden on lower income groups.
#5 Digital Use Grew During Pandemic
Due to implementation of lockdowns during the pandemic, Malaysian households were relying more on digital services.
For example, the report revealed that e-commerce and internet banking activities rose between 2017 and 2022. However, the trend of relying on digital services was sustained post pandemic only among users under 50 years of age.
Besides, health-related digital use such as for making health appointments were also on the rise in 2021. Digital platform usage was not sustained among older populations post pandemic.
Read Also: How Much Do Malaysians Have In EPF Savings?
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