Nearly 70% Of M40 Household Income Is Consumed By Basic Necessities, Dewan Rakyat Told
The next national income and expenditure study will begin in 2027.
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Middle-income households in Malaysia spend almost 70% of their earnings on necessities, leaving them with little money at the end of each month
Deputy Economy Minister Datuk Mohd Shahar Abdullah told the Dewan Rakyat that data from the Department of Statistics Malaysia (DOSM) reveals the financial pressures facing the country's middle-income group (M40), according to the New Straits Times.
Food expenditure alone absorbs 34.1% of their monthly income, while housing and basic utilities account for 22.7%, and transportation takes up another 10.6%.
The compounding weight of these recurring commitments leaves families with very little financial cushion once healthcare and education costs are factored in
"After deducting education and medical expenses, the balance of income at the end of the month is very small," Mohd Shahar said during parliamentary proceedings yesterday, 26 October.
"This is the 'middle-class squeeze' phenomenon."
According to the 2024 Household Income Survey, the M40 category, which represents income deciles D5 to D8, includes households with monthly gross incomes ranging from RM5,860 to RM12,679, with the average middle-class household earning RM8,744
These thresholds have increased in recent years. Between 2022 and 2024, the lower boundary of the M40 tier rose from RM5,250 to RM5,860, while the upper limit increased from RM11,819 to RM12,679.
Mohd Shahar noted that these classifications are reviewed regularly under the Household Income and Expenditure Survey, a comprehensive assessment conducted twice during each five-year Malaysia Plan cycle.
The next national income and expenditure study will begin in 2027, with its official findings scheduled for public release the following year.
