Malaysian economy is booming, but rakyat still suffering

Only when high-tech investments and stock market gains translate into significant wage growth and lower living costs will the average person stop feeling the burden, writes social activist Lai Chen Heng.

While having breakfast at a local kopitiam recently, an elderly man was sighing about how tough life has become.

In fact, almost everyone around us is complaining. While economists and experts keep analysing how bright Malaysia’s economic data looks, these cold, hard numbers clearly fail to reflect the real struggles people face in their daily lives.

This phenomenon, where “the experts say it’s great, but the people feel the pain”, can be explained by some basic economic concepts.

From a macroeconomic standpoint – looking at the country’s overall performance – Malaysia’s foundation is actually very solid, showing great resilience even amid global instability and geopolitical tensions:

Our Gross Domestic Product (GDP) grew by 5.4 per cent in the first quarter of 2026, surpassing many regional neighbours and driven by healthy private investment and domestic consumption.

In just the first quarter, we attracted RM22.8 billion in foreign direct investment (FDI), largely flowing into high-tech industries such as artificial intelligence (AI), data centres, chip manufacturing and electronics.

Investor confidence is reflected in the stock market. The FBM KLCI has stayed firmly above the 1,680-point mark, signalling that large corporations and institutional investors are optimistic about earnings.

As of mid-May 2026, Bank Negara Malaysia’s international reserves remained high at US$129.5 billion, thanks to successful efforts in coordinating local firms to repatriate overseas earnings.

The local job market appears perfect, with official unemployment hovering between 2.9 per cent and 3.0 per cent. In economics, anything below 4.0 per cent is considered “full employment”, meaning the nation is operating near maximum productivity.

Investors value stability. Under the Ekonomi Madani framework, the government has strictly controlled spending, removed blanket diesel subsidies and reformed the Sales and Service Tax (SST) to reduce the fiscal deficit, while maintaining Malaysia’s A-grade sovereign credit rating.

In short, Malaysia’s macroeconomic structure is durable – low unemployment, stable exports, a recovering ringgit and healthy reserves to weather global storms.

However, if the national data is so impressive, why is the uncle at the kopitiam still complaining?

This is the classic disconnect between macroeconomics – the big picture – and microeconomics, which concerns daily expenses, costs and prices.

Here are the key reasons why the average uncle and aunty at the kopitiam have yet to feel the economic “dividend”.

The gestation lag of investments

When the government announces multibillion-ringgit investments, such as BYD entering the market, everyone gets excited. However, in economics, there is something called a “gestation lag”. It takes years to process land, obtain approvals, build factories and begin operations.

Until those factories actually hire locals and local contractors get a share of the pie, it remains little more than good news on paper for the average person.

Tech talent gap

The RM22.8 billion influx into AI and data centres has created a surge in demand for high-tech talent. Because development is moving so quickly, local talent cannot be trained fast enough, forcing companies to rely on foreign experts.

These higher salaries go to foreign specialists rather than immediately trickling down to local retailers, markets or food stalls.

Stock market gains don’t pay for groceries

When the stock market index soars, the direct beneficiaries are listed companies and major investors. If the kopitiam uncle does not own those blue-chip stocks, a market rally will not make his meals or electricity bills any cheaper.

The pain of subsidy cuts

Adjusting diesel subsidies helped the government save money, but it also created an immediate supply shock. Once logistics and transport costs rise, businesses quickly pass those costs on to consumers.

As disposable income shrinks, life naturally feels tighter.

Low unemployment versus low wages

While the full-employment figure looks impressive, the quality of jobs is a different matter altogether.

If people have to work two jobs just to make ends meet, or rely entirely on the gig economy, the anxiety of daily living remains high despite the near-perfect unemployment rate.

While Malaysia’s macroeconomic performance is indeed impressive, these high-tech investments and stock market gains must eventually translate into meaningful wage growth and lower living costs before ordinary people feel the benefits.

The reality is that Malaysia’s economic transformation requires at least one full government term to build the hard infrastructure – factories, supply chains and supporting systems – and perhaps another term before the benefits truly reach the pockets of ordinary Malaysians.

We do not need to be cynical, but we must face reality. When political noise creates uncertainty, the most tangible thing that remains is the economic foundation supporting every family.

Everyone is affected, from the outskirts to the federal capital.

And as long as the nation’s macroeconomic base remains strong, there is merit in allowing the government to continue its reform agenda.

The views expressed here are the personal opinion of the writer and do not represent that of Twentytwo13.