Malaysia’s cost of living differs sharply across states, districts and cities, with many areas requiring far less household spending than Kuala Lumpur to maintain a decent standard of living, according to the Cost of Living Indicators Report, Malaysia, 2024 released by the Department of Statistics Malaysia (DOSM) .
The report introduces the Basic Expenditure of Decent Living (PAKW) Index, a new benchmark designed to measure the level of household expenditure needed to live decently across different locations.
Kuala Lumpur is set as the reference point at an index value of 100, with all other locations measured relative to it. Lower index values indicate lower required expenditure, while higher values reflect higher living costs.
Majority of districts cheaper than Kuala Lumpur
One of the report’s key findings is that 91 administrative districts recorded PAKW index values below 50, meaning the cost of decent living in these areas is less than half of that in Kuala Lumpur.
Notably, four districts recorded index values below 30, highlighting substantial disparities in household expenditure requirements across the country.
These figures underscore that while Kuala Lumpur remains the most expensive benchmark, much of Malaysia experiences significantly lower living costs, albeit still at levels considered adequate for decent living.
At the state level, Selangor consistently recorded the highest PAKW index values across all household sizes, indicating the highest cost of living outside Kuala Lumpur. For single-person households, Selangor recorded an index of 92.0, followed by Pulau Pinang (84.2) and Putrajaya (83.1).
In contrast, Kelantan, Kedah and Perlis recorded the lowest index values, reflecting comparatively lower but still sufficient costs of living.
For example, a single-person household in Kelantan requires about 46.3 per cent less expenditure than one in Kuala Lumpur. This means that if a single-person household spends RM1,000 on basic living expenses in Kuala Lumpur, only about RM537 would be needed in Kelantan.
Similar patterns were observed for larger households. For four-person households, Perlis recorded expenditure needs that were 39.1 per cent lower than Kuala Lumpur, highlighting the affordability gap between urban and less urbanised states.
District-level gaps even wider
Disparities become more striking at the administrative district level. Petaling district in Selangor was the only district to exceed Kuala Lumpur’s reference index across all household sizes making it the most expensive district in the country.
For single-person households, Petaling recorded an index of 103.3, followed by Gombak (94.9) and Johor Bahru (94.7).
At the other end of the spectrum, districts such as Pantu, Lingga and Sebuyau in Sarawak recorded some of the lowest index values, with Pantu’s index for single-person households standing at just 27.8.
In practical terms, a single-person household living in Pantu would require around 72.2 per cent less spending than one in Kuala Lumpur. For a four-person household, expenditure needs in the lowest-cost districts are less than one-third of those in Petaling, highlighting deep regional cost-of-living divides.
The report also examined cost-of-living differences among state capitals. Shah Alam emerged as the most expensive state capital, with PAKW index values surpassing Kuala Lumpur’s reference level across multiple household sizes. For four-person households, Shah Alam recorded an index of 100.3, slightly above Kuala Lumpur.
Other high-cost capitals included Johor Bahru and George Town. Meanwhile, Kangar consistently recorded the lowest index values, remaining just over half of Shah Alam’s cost across all household sizes. Kota Bharu and Alor Setar also ranked among the more affordable state capitals.
These findings suggest that even within urban centres, the cost of maintaining a decent standard of living can vary significantly depending on location.
What the PAKW Index means for households
According to DOSM, the PAKW Index is intended to provide a relative and practical tool to help policymakers, researchers and households better understand living cost differences across Malaysia.
By anchoring the index to Kuala Lumpur, the indicator allows for clearer comparisons between regions, household sizes and settlement types.
Chief Statistician Malaysia, Dato’ Sri Dr. Mohd Uzir Mahidin, emphasised that higher index values do not necessarily imply a better quality of life, but rather reflect higher expenditure requirements. Conversely, lower index values indicate lower costs while still meeting the threshold for decent living.
Shahriena Shukri is a journalist covering business and economic news in Malaysia, providing insights on market trends, corporate developments, and financial policies. More about Shahriena Shukri.
