(FILE PIX) The research house said the wage growth for manufacturing and services sectors were expected to perform better than in 2016 as economic indicators of domestic and global economic activities were showing signs of sustained recovery. NSTP Pix.

KUALA LUMPUR: The Malaysian median wage growth is expected to reach 6.5 per cent this year on the back of an improved and stable labour market, MIDF Research said.

It said the projected growth was in line with the country's track record which saw median wage grew above 5 per cent for two consecutive years, namely 6.7 per cent in 2015 and 6.4 per cent in 2016.

"Moving forward, we foresee wage growth to stay on course, registering above 5 per cent, given upbeat outlook for 2017," it said in a research note today.

The research house said the wage growth for manufacturing and services sectors were expected to perform better than in 2016 as economic indicators of domestic and global economic activities were showing signs of sustained recovery.

Meanwhile, it said inflation is expected to average at 4.5 per cent this year, mainly driven by cost-push factors, while unemployment rate is projected to be at 3.3 per cent.

"Strengthening labour market and steady wage growth will boost private consumption and contribute positively to Malaysia's economic performance in 2017," it added.

On last year's performance, MIDF Research said Malaysia's median wage grew 6.4 per cent to RM1,703 resulted from the introduction of minimum wage, gradual pick up in the overall economy since second half of 2016 and strengthening domestic demand.

"Thanks to the new rule, wage growth for all states in Malaysia increased last year at a range of 2.6 per cent to 14.5 per cent with three states recording double digit growth last year, namely Kedah, Kuala Lumpur and Sabah," it said.

It added that wage growth in Kedah rose 14.5 per cent while that of Kuala Lumpur jumped from zero growth to 13.6 per cent and Sabah's wage growth continued expanding at double digits for four consecutive years. – Bernama