KUALA LUMPUR: The upcoming salary increment for civil servants will significantly boost Malaysia's economic growth and have a positive impact on Small and Medium Enterprises (SMEs), especially those in the property and retail sectors.
Housing and Local Government Minister Nga Kor Ming in a statement today said the increase in civil servants' salaries would help boost domestic consumption, while creating new business opportunities for the SMEs.
"We can expect to see an improvement to open up new business opportunities, while generating more jobs and subsequently stimulate the nations economic growth.
"The salary adjustment, to be announced by Prime Minister Datuk Seri Anwar Ibrahim at Putrajaya tomorrow, is projected to have a multi-billion ringgit impact on consumption and produce a substantial ripple effect across the market," Nga said in a statement today.
He said Malaysia's capital market ratings by international financial service providers such as JP Morgan and Goldman Sachs reflect growing confidence in the country's economic outlook.
Nga said economic research institutions are predicting that Malaysia's economic growth in the second quarter of this year will exceed six per cent, surpassing initial government projections.
Improvements in export performance and a revitalised domestic demand powered up Malaysia's economy in the first quarter of 2024 by recording a Gross Domestic Product of 4.2 per cent growth.
Nga said Malaysia's economy grew by 4.2 percent year-on-year, driven by increased household spending, strong trade volumes, and improvements in the labor market.
"The number of employed individuals has reached a historic high of over 17.1 million, and the unemployment rate has dropped to 3.3 percent, indicating near-full employment. All this points in the direction of strong economic recovery and steady growth under the present leadership," he said referring to Anwar's leadership.
Anwar will be making some key announcements about the Public Service Remuneration System (SSPA) at the 19th Majlis Amanat Perdana tomorrow.
"The Madani government will continue to closely monitor economic trends and is committed to promoting sustainable economic growth through various policy measures to ensure widespread benefits across all sectors," he added.