KUALA LUMPUR: The rulling Barisan Nasional coalition, led by Prime Minister Datuk Seri Najib Razak, is expected to secure a comfortable victory at the 14th General Election next month, according to Oxford Economics.
The research firm said Najib had announced a number of election pledges, including an increase in the salaries of civil servants and higher minimum wages. These could boost Malaysia’s economic growth by around 0.25 percentage points this year.
“Our baseline assumption is that the ruling coalition will comfortably secure victory at the elections on May 9. An increase in BN’s majority would strengthen the prime minister’s position as leader of the BN coalition,” Oxford Economics lead economist Sian Fenner wrote in a report today.
Fenner said Najib had also released a manifesto aimed at addressing concerns over the rising cost of living.
“On top of the last budget’s income tax cuts and higher cash payments for low income households, the aggregate salaries of civil servants, around 10 per cent of all employed, will be raised by a total of RM1.46 billion effective from July 1.
“Najib has also pledged an increase in the minimum wage to a maximum of RM1,500, from between RM950 and RM1,000 currently, over the next five years,” Fenner added.
Oxford Economics maintained its gross domestic product (GDP) growth forecast of 5.2 per cent as rising US-China trade frictions are likely to dampen trade.
Fenner said the inclusion of other measures such as debt relief for palm oil farmers and the promise to improve infrastructure pointed to some upside risk to Oxford Economics’ GDP forecast this year.
“We see upside to the outlook for household spending given the likely boost to personal income. Using the Oxford Economics Global Economics Model, we estimate that a 10 per cent increase in the minimum wage this year (consistent with the around 50 per cent rise promised over the next five years) and an increase in civil servants’ earnings could boost GDP growth by around 0.25 percentage points this year from our current baseline projection of 5.2 per cent,” Fenner said.