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Fallacy to blame only GST for higher cost of living - BNM governor

The rise in the cost of living cannot be solely attributed to GST, says Bank Negara governor Muhammad Ibrahim.

“It is a red herring. Sometimes GST has less to do with it,” he said when asked on the general perception that the higher cost of living was due to the implementation of the broad consumption tax.

“People’s income must go up. We need to improve their productivity, their level of education and skills. We need our industries to go up the value chain so that they can create good-paying jobs,” he said in a briefing with senior editors on Tuesday, ahead of the release of BNM Annual Report 2017 and Financial Stability and Payment Systems Report in Kuala Lumpur today.

He said people’s problems could not be viewed from just one perspective.

“Because, if their income is not as much as it should be, then it causes other problems. The affordable housing issue is due to low income. Not enough income to catch up with galloping house prices,” he explained.

Muhammad said based on the central bank’s observation, the low income (B40) group’s expenses increased by six percent while wages increased by 5.5 percent.

“If we are really to become wealthy, the types of jobs we generate must be of quality. We cannot generate jobs that attract only foreign workers,” he added.

- Bernama

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