Six States with the Highest Cost of Living in 2023
The Cost of Living Indicators for 2023, a publication by the statistics department (DOSM), reveals the states with the highest cost of living increase last year. Here, we’ll explore the top six states with the highest cost-of-living increase, using the data and inflation rates to provide more context on which areas of spending are increasing the most, as well as household income and expenditure data to detail the differences across the states.
1. Putrajaya
The federal territory of Putrajaya had the greatest increase in living costs last year at 4.6%. Putrajaya is the centre of government, and its population grew by 1.5% to 118,800 last year. Its proximity to Kuala Lumpur and Cyberjaya, the base for many local and international technology companies, makes it an attractive option for those who work in these areas. The average household income in Putrajaya is the highest in Malaysia at RM13,473 per month. However, as more people move to the area and start spending, things naturally get expensive. Food and restaurant/hotel prices rose by a whopping 5.9% and 5.5%, respectively, last year, while housing and utility prices also shot up by 4.9%.
2. Perlis
This small state had one of the highest increases in cost of living last year, at 3.9%. Perlis lies on the border with Thailand, which has allowed the state to benefit from tourists following the reopening of international borders and travel after the pandemic. Restaurant and hotel prices rose the most by 8.2% in 2023, while recreational services and culture also went up by 4.5%. With this sharp increase, those in Perlis might find things a bit challenging, given the average household income here is one of the lowest at RM5,664 per month.
3. Johor
Johor comes in third on this list, with a cost-of-living rise of 3.5%. Like Perlis, Johor experiences the highs and lows of tourist activity due to its proximity to neighboring Singapore. Food and restaurant/hotel prices rose sharply by 4.3% and 5.8%, respectively, last year. Education prices also increased by 7.1%, driven by the growing trend among Malaysians and Singaporeans to send their children to schools in Johor, considering it is cheaper due to the strong SGD and relatively easy traveling arrangements.
4 & 5. Melaka & Kuala Lumpur
Beautiful and historical Melaka is joint No. 4 with KL, with a cost-of-living increase of 3.3%. Food and restaurants/hotels lead this growth, with prices rising by 4.6% and 3.5%, respectively, in 2023. By district, Jasin (+3.5%) was the main contributor: a plate of white rice, chicken, and vegetables cost RM9 here, comparable to prices in major cities such as KL (RM8.50), Seremban (RM8.75), and Klang (RM8.75). Kuala Lumpur, the centre of employment for Malaysians from all over, saw a living increase of 3.3%. Restaurant/hotel and food prices rose the most, by 6.9% and 4.1%, respectively, last year.
6. Selangor
Finally, Selangor ranks sixth on this list with an increase of 3.2%. The state has the same concerns as KL with food and restaurant/hotel prices driving most of the increase, at 6.1% and 6.2%, respectively, in 2023. The average household income is third-highest at RM12,233 per month, while spending is also high at RM6,770 per month. House prices in Selangor are expensive at around RM535,131.
Conclusion
The data highlights the challenges faced by states with significant tourist activity, such as Perlis and Johor, and the impact of increasing costs on household income and expenditure. The article aims to provide a comprehensive overview of the six states with the highest cost-of-living increase last year, using the data to shed light on the areas of spending that are increasing the most.
Frequently Asked Questions
- What are the states with the highest cost of living in 2023?
- Putrajaya, Perlis, Johor, Melaka, Kuala Lumpur, and Selangor
- What are the key drivers of cost of living increases in these states?
- Food and restaurant/hotel prices, education prices, and housing and utility prices
- What is the average household income in each state?
- Putrajaya (RM13,473), Perlis (RM5,664), Johor (no data available), Melaka (no data available), Kuala Lumpur (RM13,325), and Selangor (RM12,233)