The latest Household Income Survey by the Statistics Department shows a 7.2% increase in average household income in 2012 compared with a similar survey carried out in 2009.
In 2012, the inflation rate increased 1.6% and inflation for the main group of food items increased 2.7%, the department said in a statement released in Putrajaya today.
"The Salary Survey 2013 by the Malaysia Employers Federation (MEF) shows that salaries for executives increased 6.3% while salaries for non-executives increased 6.7%," it said.
In Budget 2012, Prime Minister Datuk Seri Najib Razak introduced the New Civil Service Remuneration Scheme (SBPA), with civil servants enjoying an annual salary increment of RM80 to RM320 according to their grade.
In addition, civil servants who opt to receive the SBPA will receive an annual increment of between 7% and 13%.
For 2013, inflation as measured by the Consumer Price Index stood at 2.1%.
Early this year, KPMG Malaysia, a global audit, tax and advisory services company, urged both the public and private sectors to gradually increase salaries in view of the Goods and Services Tax (GST) to be implemented in April 2015.
Managing Partner Johan Idris suggested a 6% increase in employees' salaries per annum to help tide over the high cost of living in Malaysia.
"Six percent would be a good example to begin with especially after the GST implementation, new electric tariffs, petrol subsidy cuts and new toll rates," he said.
But RAM Holdings Bhd had reportedly said otherwise.
Employers, especially in the private sector, have been giving an average increment of between 5% and 6% to their employees for the last several years, its group chief economist Dr Yeah Kim Leng said.
"Following the GST implementation, the average household would be able to cope as long as the income increases above the average consumer price index or the rise in the cost of living," he said.
The Statistics Department is now conducting the Household Expenditure Survey as well as the Basic Amenities Survey for 2014.
It involves some 80,000 households all over the country. Field data collection started in January and will end in December, with the survey report to be announced in June 2015.
The Household Income Survey is conducted twice every five years, while the Household Expenditure is conducted once every five years and the Consumer Price Index every month. – Bernama, February 20, 2014.