According to the Economic Outlook 2025 Report, released by the Ministry of Finance today, the government must strengthen institutional integrity, enhance public sector accountability, and promote wider engagement in government processes to ensure economic stability and development progress.
"Special Cabinet Committee on National governance (JKKTN) is established to curb corruption, law reforms to modernise outdate regulations and institutional improvement," according to the report.
It added, the government will focus on innovation-led competitiveness that requires businesses and economies to adapt to the rapidly evolving global market developments.
Malaysia has emerged 33rd out of 133 countries on the Global Innovation Index (GII) 2024, its highest ranking since 2016.
Malaysia remains second among the most innovative countries in the Upper Middle-Income Countries category and ranked first in three critical sub-indicators, namely graduates in sciences and engineering, high technology and creative product exports.
Meanwhile, the report highlighted that the rakyat's well-being will focus on wage structure, therefore institutional reform is essential to establish a more supportive mechanism, which can significantly improve the wage structure.
"Malaysia has achieved significant economic growth over several decades. In line with this achievement, the government has continuously implemented upskilling and retraining initiatives to meet industry demand and encourage wage increment.
"Furthermore, a pilot project on progressive wage policy has been introduced, which is also intended to increase wages in line with workers' performance. Despite these efforts, the labour market continues to face low wage levels, with median and mean wages rising only around four per cent annually," it said.
According to the report, initiatives by the government among others the Payung RAHMAH initiative, Sumbangan Tunai Rahmah, and targeted social assistance programmes will cushion the impact of the rising cost of living among the vulnerable groups.
"Rising costs of food, housing, transportation, healthcare, and education have contributed to the financial strain of households. These costs can be particularly burdensome for vulnerable families, making it harder for low and middle-income households to save and invest as they spend a large proportion of their income on necessities.
"These situations have exacerbated socioeconomic disparities, impacting overall quality of life. The effect of rising costs has highlighted the need for comprehensive policy measures to improve living standards," it said.
Quality infrastructure was also highlighted in the report as the government continuously prioritises upgrading infrastructure and expanding its network, particularly for federal and state roads as well as key infrastructure projects.
"However, quality infrastructure remains a challenged in the rural and underserved areas, contributing to regional disparities across regions in Malaysia.
"In addition, balanced development across the country is pertinent to ensure the rakyat has quality and reliable access to fundamental amenities such as treated water, electricity, internet connectivity and transportation networks," it said.
--BERNAMA
