Research 2023

In November 2023, Malaysia’s trade was reported to have slowed at a moderate rate of 2.4% year-on-year (y-o-y) to RM231.79 billion. Total exports were recorded at RM122.10 billion, a contraction of 5.9% y-o-y while imports grew by 1.7% to RM109.69 billion for the same period. Trade surplus was valued at RM12.41 billion, making it the 43rd consecutive month of surplus since May 2020. Malaysia’s performance was in tandem with its key trading partners notably Taiwan, ROC and Indonesia which posted negative trade growth in November 2023 and a drop in global imports.

INSAP believes that this new tax called the Low Value Goods tax is punitive to the lower income groups as it applies only to imported to goods below RM500. This is presumably also an attempt to plug the tax leakage that is prevalent in the Online Market Place (OMP). On top of it, the process of collection is unclear hence, the roll- out plan and collection are not transparent thus, may be subjected to abuse.

A new Loss and Damage Fund has been established to aid developing countries facing the brunt of climate change impacts.

Initial funding is $400 million, with pledges from Germany, UAE, UK, Japan, and EU.

Developing countries, like Malaysia, contribute little to climate change but suffer disproportionately from its consequences.

Malaysia’s wage landscape, influenced by factors like recent currency devaluation, escalating youth unemployment, and heavy reliance on foreign labour, primarily relies on the Minimum Wage Model. Despite the recent increase to RM1,500 per month with annual rises of 5.24% for Peninsular Malaysia and 6.49% for Sabah and Sarawak since 2013 recorded, overall labour productivity only managed a 2.3% annual increase from 2013 to 2022. This disparity between consistent minimum wage growth and slower productivity escalation poses indirect risks of potential job losses or underemployment in the long run. Could the Progressive Wage Model (PWM) provide a solution or bring about a positive impact to our wage landscape?

Malaysia’s wage landscape, influenced by factors like recent currency devaluation, escalating youth unemployment, and heavy reliance on foreign labour, primarily relies on the Minimum Wage Model. Despite the recent increase to RM1,500 per month with annual rises of 5.24% for Peninsular Malaysia and 6.49% for Sabah and Sarawak since 2013 recorded, overall labour productivity only managed a 2.3% annual increase from 2013 to 2022. This disparity between consistent minimum wage growth and slower productivity escalation poses indirect risks of potential job losses or underemployment in the long run. Could the Progressive Wage Model (PWM) provide a solution or bring about a positive impact to our wage landscape?

We appreciate the fact that the MOF has acknowledged the need for fiscal discipline and took the bold steps to move towards reducing the nation’s fiscal deficit progressively cognizant of the implications of any major shift in strategy. Nevertheless, we are relieved that the fiscal deficit for 2024 is targeted at 4.3% compared to 5% and above in the last two years.

In addition, we are glad that Budget 2024 attempts to redistribute savings from impending subsidy rationalisation and savings from more prudent government spending to widen the spread of aid, assistance, cash transfers to lower- and middle-income groups, and farmers. PM Anwar also assured Malaysians that the government will exercise responsible spending use the savings from lower subsidies to directly fund development activities including green initiatives, improving productivity of agro- activities and prioritise improving the living conditions for millions of government personnel.