Wages trail price rises despite easing inflation
BNM recorded a 9.3% rise in headline CPI between 2019 and 2024, against nominal wage growth per worker of 7.2%.
Slower inflation has not necessarily eased household affordability pressures, Bank Negara Malaysia (BNM) said, as accumulated price increases have exceeded wage gains. The central bank said stronger incomes, alongside price stability, were needed to protect purchasing power.
In its Annual Report 2025, BNM put the increase in headline Consumer Price Index (CPI) at 9.3% for 2019–2024, compared with 7.2% growth in nominal wages per worker. It said households consequently needed to work longer to cover the same purchases.
Headline inflation for 2025 averaged 1.4%, a five-year low. During the first nine months of 2026, inflation averaged 1.8%, while the core measure stood at 2%. BNM explained that inflation measures the pace of price increases rather than the price levels consumers already face.
Household perceptions are particularly influenced by regular purchases such as food and beverages, BNM said. Price rises also tend to be remembered more strongly than reductions, while the CPI cannot fully represent differences in individual households’ spending, incomes and commitments.
BNM called for targeted fiscal support and structural changes to improve productivity and earnings alongside monetary policy. It said high-skilled roles represented 26% of new jobs in 2025, below the 30% average for 2020–2024, underscoring the need for more employment offering higher pay.
