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Govt planning mechanism to manage cost of living, tame inflation, says Rafizi

Publish date: Wed, 15 May 2024, 10:52 PM

PUTRAJAYA (May 15): The government is planning a mechanism to manage the cost of living and tame the country’s inflation, said Minister of Economy Mohd Rafizi Ramli.

He said discussions on wages, cost of living and inflation had to be managed carefully.

“In the past, for some quarters, every time we talk about pushing for higher wages, they will always give the drawback of inflation, but I don’t think it is a mutually exclusive situation.

“The whole cost of living issue has to be managed together. You have to look at both components - wages and inflation. That’s why the mechanism has to be done with careful planning,” he told the media after the launch of Innovathon Season 2, which will be aired on Astro.

Rafizi said the mechanism would ensure that there are alternatives and consider the overall macro-economic situation, adding that one of the best ways to manage the cost of living is to ensure healthy wage growth over a period of time.

Rafizi said this in response to questions by the media following the government’s decision to increase civil servants’ salaries by 13% and the introduction of the flexible Account 3 by the Employees Provident Fund (EPF).

On May 1, Prime Minister Datuk Seri Anwar Ibrahim pledged to increase wages as part of his commitment to alleviating the living cost pressure since assuming office in 2022.

Rafizi, however, acknowledged that the implementation of the mechanism would not be smooth sailing. 

“There is a linkage between wage and inflation and growth, and that’s the duty of any government to balance everything, so that everything is sustainable. Wage growth [must be] fair and sustainable.

“And for it to be sustainable, inflation must be managed, so that it remains moderate and will not have an impact on growth,” he said.

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