The Middle-Class Squeeze: Nearly 70% of M40 Income Goes to Basic Necessities
Written by: Amalia Azmi & Nor Ain Mohamed Radhi
By: Adriana Aucasa
Nation | Credits: New Straits Times
SUMMARY OF NEWS
Kuala Lumpur, 25 Oct 2026: Middle-class households in Malaysia are facing intense financial pressure, with nearly 70% of the M40 group's income now consumed entirely by daily essentials. According to Statistics Department data presented in the Dewan Rakyat by Deputy Economy Minister Datuk Mohd Shahar Abdullah, 34.1% of this income is strictly allocated to food. Housing and utilities take up another 22.7%, while transportation accounts for 10.6%.
Once families clear their remaining mandatory expenses like education and medical bills, the balance left at the end of the month is alarmingly small. Mohd Shahar explicitly identified this reality as the "middle-class squeeze" phenomenon, a term that captures the practical financial constraints and quiet struggles faced by average earners trying to manage their daily lives.
The 2024 Household Income Survey places the M40 bracket between a monthly gross income of RM5,860 and RM12,679, averaging at RM8,744. Although this threshold has increased from the 2022 range of RM5,250 to RM11,819, the heavy expenditure on basic needs proves that an upward shift in gross income does not necessarily translate to financial comfort. The government will conduct its next survey in 2027 to further track these household economics, with official findings expected the following year.
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