Income inequality is down but so is real purchasing power

Bede Hong

The prices of food and services have gone up due to a combination of ringgit value, inflation, and the goods and services tax. – The Malaysian Insight file pic, November 11, 2017.

YOUR income is up and so are your expenses, economists said as they explained how purchasing power is shrinking despite the government boasting that the gap between the richest and poorest Malaysians has narrowed in recent years.

Prime Minister Najib Razak noted in Budget 2018 that the country’s Gini coefficient, a measure of income distribution among a population, improved from 0.441 in 2009, when he assumed power, to 0.399 in 2016.

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