MIER hopes 2018 budget will tackle rising cost of living issue

KUALA LUMPUR: The Malaysian Institute of Economic Research (MIER) hopes the 2018 Budget will tackle the rising cost of living issue by reducing taxes or providing outright grants such as the 1Malaysia People's Aid (BR1M).
Executive Director Dr Zakariah Abdul Rashid said something must be done to supplement household income by increasing disposable income, either through reducing personal income tax or giving BR1M.
"Furthermore, it is important to increase the salaries and wages of consumers because this will automatically address the issue of low household income.
"Compensation of employees to gross domestic product ratio in Malaysia is still quite low. Although there had been positive movements in this area, the pace is quite slow," he told a press conference on the Malaysian Economic Outlook for the third quarter here, today.
Meanwhile, Zakariah also shared MIER's Business Conditions Index (BCI) for the third quarter of 2017, which fell to 103.1 points from 114.1 points in the second quarter, still above the demarcation level of 100-point threshold of optimism.
He said the third quarter BCI showed that businesses were optimistic about the near-term prospect, as well as on the export demand, with capacity utilisation rising to 46.6 points during the quarter under review from 42 points in the second quarter.
"Overall, manufacturing outlook in the next quarter is expected to be bright as local sales, prices and export orders will likely improve," Zakariah said.
However, he said consumer confidence remained weak as the third quarter's MIER Consumer Sentiment Index continued to be below the demarcation level of 100 points, retreating 3.6 points quarter-on-quarter to 77.1, attributed to concerns over jobs and incomes.
On crude oil price projection, he said it would likely average at US$55 (RM232) per barrel for 2017 and improve to US$60 per barrel next year. — Bernama