KUALA LUMPUR (Sept 26): Absolute poverty increased from 2019 to 2022, especially among urban households, rising to 4.5% in 2022 from 3.8% in 2019, according to a Khazanah Research Institute (KRI) report.

In its report ‘The State of Households 2024: Households and the Pandemic 2019-2022’, KRI said that  Kuala Lumpur was the area with the highest household increases with 6,774 households, followed by Kuala Muda (5,229) and Kota Kinabalu (5,117).

The report, released on Thursday, said the Covid-19 pandemic reversed all earlier gains made in poverty reduction.

“The pandemic disproportionately reduced the residual incomes of lower-income households,” it said.

KRI reported that households with incomes of RM3,000, RM5,000 and RM11,000 and above saw a growth of 2%, 5.1% and 6.6% respectively in 2022, while those in the lower income category declined as low as 40.9%.

“Districts with higher incidences of households in absolute poverty also had lower access to basic amenities, indicating a strong overlap between monetary and non-monetary poverty,” it said.

Hence, the report suggested targeted and inclusive economic development policies to reduce regional disparities, improve access to basic amenities, and support income growth.

Besides this, KRI said Coivd-19 related Employees’ Provident Fund Organisation (EPF) withdrawals have sharply widened income disparity, disproportionately affecting lower-income contributors.

“Individuals in the lower income decile withdrew nearly all their savings (up to 98% both in the age group of 30 and below as well as 30-54 age group), compared to much lower rates in higher deciles,” it said.

KRI also said that nationally, household expenditure as a percentage of income has continued to rise, with urban households seeing higher growth (5.6%) compared to rural ones (3.6%) from 2014 to 2022.

The report said that generally, households allocate the largest share of their monthly expenditures to three fundamental necessities, namely housing and utilities (23.2 per cent), food at home (16.3 per cent), dining out 15.3 per cent and transportation 11.3 per cent.

“Food away from home is rapidly substituting food at home, with Malaysian households spending nearly half, or 48%, of their food expenditure on food away from home post-pandemic,” it said.

KRI’s research also found that both digital access and usage rose during the pandemic but were not sustained evenly post-pandemic, especially in internet banking and digital health.

“The use of the internet to seek health information and to make health appointments online dropped after 2021, more starkly in those aged above 60.

“This pandemic-driven surge in digital health use highlights the potential benefits of healthcare digitalisation and also the challenges to its implementation,” it said.

KRI said the decade-long process of healthcare digitalisation has faced challenges in upgrading legacy infrastructure and implementing data integration across the public and private sectors.

“In addressing these barriers, the country has transitioned to a more lightweight, mobile and cloud-based approach.

“A nationwide, future-proof digital health system needs to be inclusive, patient-centric and well-governed. Health data-specific data regulations and increased investment in foundational healthcare digitalisation are instrumental in achieving this goal,” it added.

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