Explained: Current State of Malaysian Income

Gross Domestic Product, GDP in Malaysia for 2021 is USD 372.7 billion [1]. With current population (inclusive of foreigners) standing at 32,776,195 peoples. This translates to GDP per capita of USD 11,371. In MYR term it is equivalent to MYR 50,646 per person for 2021. Divided by monthly it should be RM 4,221 per month. Is this the right figure to gauge the prosperity of each country? What about its citizen income, saving and investment?

Let’s explore shall we?

Households source of income

According to the World Bank [2], most of Malaysians only have 1 job contributing to their source of income. Therefore, households nowadays need to earn dual income to sustain their households end needs.

Households shares of income based on GDP

Based on circular flow of income, albeit of households holding the power in terms of capital and labour. We can see that compensation to the households is minimal to revenue generated by the company. The ratio currently stands at 40:60 [3].

Malaysia’s income as a share of GDP is low [4]. Especially when you compared to developed countries. With Singapore championing us in the ASEAN region. Whereas in Asia, Japan at the top of it by 51.6%

Employees compensation as a percentage of GDP, 2015

Households income

Before we go further, we need to look at the salary part. How much on average or median is Malaysian currently earning. According to Khazanah Research Insitute, KRI [4], households income in Malaysia according to national and ethnic level is as follows:

Mean – RM 7,901
Chinese – RM 7,391
Indian – RM 6,000 (approximately)
Median – RM 5,873
Bumiputera – RM 5,420
Others – RM 4,100 (approximately

Breakdown by ethnic

Above infographic may be further breakdown into ethnic based on social status [5]. We shall look into 3 main ethnic over here. As they are the biggest residents in Malaysia. Their households income is as per below.

Distribution of households income by ethnic group in Malaysia, 2016 & 2021

Breakdown by income group

Most of Malaysian households (according to 2016) roughly falls into M40 income bracket [4] as depicted by the following statistics:

Share of total households income group and state, 2019

If you wanted to look into different angle, this was based on from big perspective of median and income category. Statistics below is very much transparent.

Percentage distribution of households by income category, 2016

Households expenditures

Based on income group, income from RM 6,000 and below spent more than 20% on food. To meet their basic needs. As the income growing bigger, Malaysians may consider increasing expenses on transportation. Whereas education and health become less necessary for low income group as they are focusing on meeting daily needs

Share of mean households consumption expenditure, by category and income bracket, 2019

Households debt

As of 2021, we can see that every Malaysians are highly in debt [6]. Based on debt to GDP ratio percentage, it was at 89.0%. We are just behind Thailand to occupy 2nd place in ASEAN region.

The breakdown of this debt is mainly coming from mortgage. Then followed by personal loan, hire purchase loan, credit card debt and other debt accordingly. 89% already surpassing threshold normally set forth by Financial Planner around 30% to 50% of the gross income.

Households residual

After deducting all the expenses and consumption to meet daily needs, due to increasing cost of living, households are left with very minimal excess to start meeting other necessary expenditure. For instance protecting themselves from any risk. Therefore hindering themselves to move up social ladder. As they cannot afford to get sick without any protection.