Why cost of living remains high

KUALA LUMPUR (Aug 3): The country may have had a historical change in government and is making inroads into political and institutional reforms, but the persistent high cost of living remains an issue policy makers from the past and present government have not been able to solve.

Why does this problem persist? Economists believe the root cause stems from structural issues such as slower growth income that does not keep up with rising prices, unaffordable property prices, and a weak ringgit. Other contributing factors include creeping food prices and changing lifestyles.

Though property prices were a prime contributor, it should be noted that some asset prices have declined. Car prices for example, have come down, especially for a number of popular models favoured by the average middle income Malaysian family, such as the Perodua Myvi and the Honda City.

The Edge Malaysia in its cover story takes a closer look at the cost of living problem, and recommendations by economists and academicians on how the government, and the Malaysian people, can play their part in addressing the issue.

From the government’s perspective, Minister of Domestic Trade and Consumer Affairs Datuk Seri Saifuddin Nasution Ismail shares with The Edge his thoughts on the matter, as well as initiatives taken by his ministry.

In our accompanying story, we look at the scenario of three households with varying incomes in Malaysia, to see how they cope with rising costs and how they make ends meet.

Rising prices and living beyond one’s means have left household reserves depleted with hardly any savings each month.

We also look at prices of certain food items which have come down in June 2019, compared to May 2018 – a month before the goods and services tax was abolished last year.

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Source: TheEdgeMarkets