MIER Non-Resident Senior Fellow Dr. Khalid Abdul Hamid speaks to reporters during the National Economic Outlook Conference (NEOC) at the AFFIN Tower Auditorium, TRX. NSTP/ HARI ANGGARA.
KUALA LUMPUR: Structural reforms under the 13th Malaysia Plan (13MP), particularly in the labour market, are key to strengthening fundamentals and supporting future growth, said the Malaysian Institute of Economic Research (MIER).
MIER non-resident senior fellow Dr Khalid Abdul Hamid said raising wages and improving income levels are critical to lifting overall economic performance.
“I spoke about the seven indicators that can bring growth, which are raising the ceiling and raising the floor.
“Compensation of employees is only about 32 to 33 per cent. High-income countries are at 45 to 50 per cent. So raising wages is one way to lift growth,” he said.
Speaking to reporters at the National Economic Outlook Conference today, he said higher wages, especially for lower-income groups, would directly support consumption.
“If the salary goes up, it can solve many problems. At least it eases a lot,” he said.
Khalid added that targeted subsidies and the Budi Madani support packages could also stimulate spending if implemented well.
“If people like it, you will see consumption rise. RM50 can get you RM65 or RM66 worth of petrol. That gives people the catalyst to spend more,” he said.
On the potential impact of US tariff actions, Khalid emphasised that Malaysia must assess both direct and indirect consequences.
“The impact is real. It will feed into our cost of living and all kinds of costs. Tariffs can quickly raise prices due to multiple mark-ups in global trade.
“When you export RM100 of product here, it becomes RM200 in the United States. When it comes back to us, it becomes RM400. So your handphone, your computer, everything will increase,” he added.
While US court challenges and political uncertainty may delay implementation, Khalid said underlying policy positions between governments will likely remain unchanged.
“The policies are between the government and the government, not the person.
“We don’t focus on just one or two countries. We have 12 to 15 or more. Diversification improves quality and helps us move forward,” he said.
