Malaysians remain ‘happy’ as wages recover post Covid-19, but rising costs squeeze poorer households, says KRI

According to Khazanah Research Institute’s latest report, household expenditure grew by more than 15 per cent for the lower 70 per cent of the income distribution between 2019 and 2024. — Picture by Sayuti Zainudin

First Published: Friday, 23 Oct 2026 2:55 PM MYT

KUALA LUMPUR, Oct 23 — Malaysians are still classified as “happy” as wages have recovered to above pre-Covid-19 levels, despite household spending rising rapidly among lower-income households, the Khazanah Research Institute (KRI) found in a recent survey.

The report, titled “From Income to Wellbeing: The State of Households 2026”, said median monthly household income reached RM7,017 in 2024, while labour force participation rose to 70.6 per cent that year.

Putrajaya recorded the fastest wage growth, with median monthly household income rising from RM2,700 in 2010 to more than RM4,500 in 2024.

However, the report also noted that nearly half of Malaysian households (46.2 per cent) lived in 22 of the country’s 166 districts, where median monthly household income was below RM7,017.

Some 111 of Malaysia’s 166 districts also recorded poverty rates above the national rate of 5.1 per cent. The poverty rate in 66 districts was more than twice the national rate, the report said.

Even as wages rise, lower-income households are spending more due to rising living costs, leaving them with little disposable income.

The report said household expenditure rose by more than 15 per cent among the bottom 70 per cent of the income distribution between 2019 and 2024.

However, spending barely changed among the top 10 per cent of households.

The squeeze was more severe for the bottom 10 per cent.

“Households in the bottom 10 per cent of the income distribution retained only 1.9 per cent of their gross incomes after covering their consumption expenses, down from 10.8 per cent in 2019,” KRI said in the report.

However, it noted that residual income does not account for tax payments, loan repayments or remittances to other households.