High-income nation dream hinges on whether malaysians feel the difference
PETALING JAYA: Malaysia could achieve World Bank high-income status as early as 2027, but economists say the milestone may offer little comfort to millions of Malaysians unless wages, job quality and purchasing power improve alongside economic growth.
Socio-Economic Research Centre executive director Lee Heng Guie said Malaysia could cross the World Bank’s high-income threshold between 2027 and 2029, provided economic growth remains resilient and the ringgit continues to strengthen.
READ MORE: Malaysia nears high-income status, but workers say cost pressures remain
“Assuming real GDP growth of between 4% and 5%, and nominal GNP growth of between 6% and 6.5%, Malaysia could cross the high-income threshold between 2027 and 2029, depending on the strength of the Malaysian ringgit,“ he told theSun, citing Bank Negara Malaysia’s Economic and Monetary Review 2025 and its first-quarter 2026 statement.
However, he added that attaining high-income status would be little more than a statistical milestone if income inequality and cost-of-living pressures remain unresolved.
“Achieving high-income status, or a higher income per capita, is often seen as just a statistical label, masking income inequality between urban and rural areas, and between top, middle and low-income households.
“Most low and middle-income households continue to face pressure on their purchasing power, shaped by rising living costs, uneven wage growth and high household debt.”
He cited Statistics Department data showing median monthly household income increased from RM4,585 in 2014 to RM7,017 in 2024.
Lee said another key indicator was the proportion of national output flowing back to workers through wages and other employment-related income.
He cited department data showing compensation of employees accounted for 33.6% of GDP in 2024, well below the 13th Malaysia Plan target of 40% by 2030.
“Improving the ratio requires structural reforms that ensure wage growth matches employees’ qualifications and skills.”
He added that a low unemployment rate alone did not mean workers were securing jobs that matched their qualifications.
Lee called for stronger collective bargaining, productivity-linked wage growth, stricter enforcement of minimum wage laws and greater investment in higher-value industries and workforce training.
Malaysian Institute of Economic Research and Universiti Malaya Social Wellbeing Research Centre senior research fellow Dr Zulkiply Omar agreed Malaysia could technically attain high-income status by around 2028.
“Based on the statistics, it is accurate. If there is no major problem and current growth continues, technically we could achieve high-income status within that period.”
However, Zulkiply emphasised that the classification reflected a national average rather than the financial reality experienced by individual households.
“A high-income country is not necessarily a developed country.
“High-income status looks at national income, but developed status also looks at the wellbeing and living standards of the people.”
He added that the real benchmark was whether households, including those in rural and remote areas, enjoyed higher incomes and reliable access to education, healthcare, clean water and electricity.
“We cannot use one statistic to tell the whole story. We must look at median household income, wages, employee compensation and whether the country’s wealth is actually enjoyed by the people.”
