Economic toll of haze in Malaysia could hit RM1.5b a month as business and health costs mount, experts say

Haze obscures the city skyline in Kuala Lumpur on September 15, 2026. — Picture by Firdaus Latif

By Malay Mail

First Published: Wednesday, 14 Oct 2026 10:17 AM MYT

KUALA LUMPUR, Oct 14 — The prolonged transboundary haze is costing Malaysia between RM20 million and RM50 million daily in economic disruptions, soaring healthcare bills, and lost worker productivity, according to experts.

Sunway University economics professor Dr Yeah Kim Leng warned that this conservative estimate compounds rapidly over time, The Star reported.

“The actual economic toll could potentially balloon to a whopping RM600 million to RM1.5 billlon a month,” he said.

Yeah highlighted tourism, aviation, and agriculture as the most vulnerable sectors.

“The hardest-hit sectors are tourism and aviation. Air pollution can cut arrivals by up to 8%, with GDP losses up to RM1.5 billon.

“In agriculture and plantation, Johor vegetable farmers report production declines, fruit yields have halved, and palm oil faces a six to 12 months lagged impact.”

He noted that reduced visibility and hazardous air quality also delay freight logistics, stall construction sites, and suppress retail footfall.

Universiti Sains Islam Malaysia (USIM) public health medicine specialist Dr Mohd Hafiz Jaafar emphasized that direct medical expenses reflect only a fraction of the crisis.

“Nationally, the cost from illness rose from around RM21 million in the 1997 haze to RM410 million in 2013.

“That’s only the medical bill for respiratory illness. Haze also hurts the heart and blood vessels, which we haven’t fully counted,” he said.

Beyond hospital bills, Hafiz noted that indirect productivity drains inflict substantial economic damage on employers.

“There are the hidden costs like staff who are absent, staff who turn up but can’t work properly and lost productivity.

“So haze is not just a health problem, it’s just as much an economic one,” he said.

Calling for decisive cross-border collaboration with Indonesia to extinguish fires at their source, Hafiz argued that regional prevention is far more cost-effective than absorbing recurrent financial losses.

“Prevention is cheaper than paying for the same crisis every few years. The cost is too high to ignore.”