KUALA LUMPUR: The post-Covid-19 period saw a rise in urban households experiencing absolute poverty, reversing the downward trend observed in the years prior, a Khazanah Research Institute (KRI) report said.
A household is considered to be in absolute poverty if their gross monthly household income is below the poverty line income.
The average poverty line income in 2022 was RM2,589.
It said urban households were the most affected with poverty rising to 4.5 per cent in 2022, up from 3.8 per cent in 2019.
The highest household increases in absolute poverty in Kuala Lumpur (6,774 households), Kuala Muda (5,229 households), and Kota Kinabalu (5,117 households).
"While not all districts faced a rise in absolute poverty, urban households were the most affected with poverty rising from 3.8 per cent in 2019 to 4.5 per cent in 2022."Additionally, districts with higher incidences of households in absolute poverty had households with relatively lower access to basic amenities such as access to piped clean water or garbage collection facilities, pointing to strong overlaps between monetary and non-monetary poverty," it said.
KRI's latest report, The State of Households 2024: Households and the Pandemic 2019-2022 (SoH 2024), specifically explores how short-term trends and narratives influenced by the pandemic affected households, down to development impacts at the district level.
SoH 2024 looked into four key areas: (i) household income and (ii) household expenditure, based on the Household Income and Expenditure Survey (2014-2022) data from Department of Statistics Malaysia.
The report found that the rise in absolute poverty was amid slowing household income growth compared to the decade preceding the pandemic (2009-2019), dropping from 5.3 per cent to 1 per cent.
Additionally, growth in 2022 did not reach its full potential, leaving a 13 per cent gap below pre-pandemic trends, highlighting a substantial lag in recovery.
KRI said most states experienced negative growth in household income, with Selangor's strong performance playing a significant role – without it, the national mean household income in 2022 would have been 12.9 per cent lower.
A third of districts in Malaysia saw their income growth fall into the bottom quintile of the distribution, with many experiencing negative growth.
Household income, when adjusted for inequality, grew more slowly, with 18 districts, primarily from Peninsular Malaysia, falling into the lowest growth group, resulting in decreased income and increased inequality.
KRI said the reversal of earlier gains led to an increase in absolute poverty, especially in urban households.
Residual income struggles affected households in the lower income deciles, and inadequate EPF savings raises concern about retirement readiness for many Malaysians.