(Bloomberg) -- Malaysian Prime Minister Anwar Ibrahim said the government will boost civil service salaries by over 10 billion ringgit ($2.3 billion) in the first revision to the remuneration program in more than a decade.
A majority of mid-level civil servant professionals will see their wages rise by 15%, while top civil servants will receive a 7% bump, Anwar said in a speech in the administrative capital of Putrajaya on Friday. The increases will be rolled out in phases in 2025 and 2026, he said.
The last revision for civil servants was implemented in 2012 and their salary growth has been lagging inflation, Anwar said. Malaysia has about 1.6 million civil servants out of a labor force of around 17.2 million.
The prime minister said that under the new program, pay hikes and promotions are no longer guaranteed based on seniority, but will be based on performance.
The move will bring the minimum wage of civil servants to above 2,000 ringgit a month, Anwar said, urging the private sector to follow suit. Malaysia’s current monthly minimum wage is 1,500 ringgit.
“I hope the private sector will also raise minimum wage to a more reasonable level,” he told reporters.
The pay plan comes even as Malaysia seeks to narrow its fiscal deficit to 3.5% of gross domestic product by 2025 and the government tries to pare down sovereign debt, which stood at 1.22 trillion ringgit as of end-April.
Read: Malaysia Sees Growth Near 5% in 2024 as Economy Surprises Again
Anwar also has yet to start cutting blanket subsidies for commonly-used gasoline, which is seen as key to achieving fiscal deficit targets for this year. His government started reducing blanket diesel subsidies in June.
The premier will present Malaysia’s 2025 spending plan on Oct. 18.
(Updates with Anwar’s comments from fifth paragraph)
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