KUALA LUMPUR (Oct 8): Malaysia’s income inequality was at its lowest level in five decades in 2024, but rural and ethnic disparities remain, according to the Department of Statistics Malaysia (DOSM).

Malaysia’s Gini coefficient, a measure of income inequality, fell to 0.39 in 2024 — its lowest level since 1974 when the data was collected, and slightly better than the previous low of 0.399 in 2016. The 2024 Household Income Survey, based on a sample representing 8.2 million Malaysian households, provided the data.

Median household income rose 5.1% year-on-year to RM7,017 in 2024, the report showed.

However, key differences remain.

DOSM said inequality is multi-faceted and reflects gaps in education quality, a labour market split between high- and low-skilled jobs, and big differences between urban and rural areas — especially in states like Sabah and Sarawak.

On average, rural households still earn only about half of the RM8,139 median income urban households do at RM4,588.

Income gaps also persist between ethnic groups, though they are slowly improving.

Chinese households still earn the most with a median monthly income of RM8,933, with the Bumiputera earning about 79% (RM7,964) and Indians about 89% (RM6,555) of that amount.

Further, while income inequality within the ethnic group has decreased for Bumiputera and Indians, it has slightly increased among Chinese households, the report showed.

Just over one-fifth of Bumiputera households (21.4%) earn between RM4,000 and RM5,999 a month. This income range is also the most common for Chinese (14.8%) and Indian (17.4%) households.

Households led by diploma-certified workers earned less than a third of those with a degree — pointing to the ongoing importance of higher education in social mobility.

Hardcore poverty — where people can’t afford basic food and shelter — is now rare in most Malaysian states, though it still exists in some areas.

In 2024, the average poverty line was RM2,705, while the food poverty line was RM1,236.

Relative poverty, which looks at how people earn compared to the national median, was set at RM3,509. About 16.7% of Malaysians fell below this line, showing that while extreme poverty is declining, many still struggle compared to the average household.

The World Bank, in its macro poverty outlook for Malaysia, projects that even if Malaysia became a high-income nation, more than half of its citizens may still earn below the high-income threshold — unless income inequality is reduced and economic mobility improves.