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The Covid-19 pandemic has had a significant impact on household income and made more people poorer, according to a study conducted by the Department of Statistics.
The Covid-19 impact study on household income in Malaysia for 2020 revealed that the number of poor households increased to 639,800 in 2020, up from 405,400 in 2019.
The findings of the study are contained in the Household Income Estimates and Incidence of Poverty Report, Malaysia, 2020 which the department released today.
Chief Statistician Mohd Uzir Mahidin said in a statement that the incidence of absolute poverty also increased, from 5.6 percent in 2019 to 8.4 percent in 2020, and that the incidence of hardcore poverty is estimated to increase from 0.4 percent (2019) involving 27,200 households to 1 percent involving 78,000 households.
He said the pandemic had also affected the structure of household groups, with 20 percent of households from the M40 group with income between RM4,850 and RM10,959 having moved to the B40 group.
“Households in the T20 group were also affected by the Covid-19 pandemic where 12.8 percent of this group has shifted to the M40 group,” he said.
He also said that as the percentage decrease in income for B40 and M40 households was larger than the T20 households group, the income distribution for B40 and M40 declined to 15.9 percent (2019: 16 percent) and 36.9 percent (2019: 37.2 percent), respectively.
“Meanwhile, the T20 group owned 47.2 percent of income, which increased by 0.4 percentage points from 2019,” he added.
Uzir said the mean of monthly household gross income decreased by 10.3 percent to record RM7,089 as compared to RM7,901 in 2019 and added that the decline was contributed by households or individuals who experienced loss or reduction of income, particularly those with the status of employee, self-employed and others.
“Furthermore, this reduction of income was not only caused by job loss but also contributed by the reduction of working hours and increase in skill-related underemployment,” he said.
Uzir said that all territories/states recorded a decline in mean and median of monthly household gross income. The Federal Territory of Putrajaya registered the lowest reduction in monthly household income and remained to record the highest mean and median of monthly household gross income as compared to other territories/states with RM12,322 and RM9,743, respectively.
“Meanwhile, Kelantan continued to record the lowest mean and median income with RM4,411 and RM3,010, respectively,” he said.
He also said that the incidence of absolute poverty by state shows that Sabah recorded the highest percentage of 25.3 percent (2019: 19.5 percent) while Kelantan recorded a significant increase in poverty by 8.8 percentage points to 21.2 percent from 12.4 percent (2019), followed by Terengganu by 5.9 percentage points to 12 percent from 6.1 percent (2019).
Uzir said the impact of the Covid-19 pandemic may be temporary as the economy is expected to improve and recover as the pandemic can be contained.