PETALING JAYA: Households in Malaysia’s bottom 10% income group retained just 1.9% of their gross income after covering consumption expenses in 2024 — down sharply from 10.8% in 2019, a report has found.
Khazanah Research Institute’s (KRI) State of Households 2026 report said these families had a median monthly gross income of RM2,227.
It noted that the remaining income of these households, after paying for food, went for other payments such as taxes and loan repayments, which reduced the amount available for savings.
“As might be expected, households in the bottom 10% had little room to absorb rising living costs as modest increases in expenditure took up a significant share of their income.”
The report also found that lower-income households spent a larger proportion of their budgets on food. Those in the bottom 10% allocated 38.3% of their expenditure to food, compared with 24.5% among households in the top 10%.
As a result, increases in food prices placed a greater strain on lower-income households, leaving them with less room to absorb higher costs without cutting other spending, using up savings or switching to cheaper food.
The report noted that Malaysia imports a lot of its food from just a few countries. It also stated that most of Malaysia's imported food supply comes from climate-vulnerable countries, adding another layer of risk.
“A crisis disrupting food supply and distribution could lead to price hikes or supply shortages, impacting household wellbeing unevenly.”
The report said while Malaysia's overall household wellbeing was improving, the ability to translate economic progress into better living standards remained uneven across states or districts, particularly due to differences in demographics, location and access to basic amenities or economic opportunities.
The report added that cash assistance and subsidies addressing immediate needs should be complemented by investments in infrastructure and services that delivered lasting benefits.
The report aimed to provide evidence on household conditions to inform policy discussions on development and wellbeing.