Unemployment rate to remain at 3.3%-3.4% next year

By FARA AISYAH / Pic By TMR File

The unemployment rate in Malaysia is expected to stay at 3.3% to 3.4% in the next 12 months, conforming with the strong gross domestic product growth that has also allowed the overall rate to remain below 4%.

Socio-Economic Research Centre Sdn Bhd ED Lee Heng Guie said the projection is also in line with the Bank Negara Malaysia’s (BNM) forecast of 3.3% by 2018.

“If you look at the third quarter of this year (3Q17), the unemployment rate has eased from 3.5% to 3.4% compared to the corresponding period last year.

“We can expect a slow improvement for the unemployment rate around 3.3% to 3.4% next year,” Lee told The Malaysian Reserve.

However, the youth unemployment rate hit 10.6% in 2016 and about 23% of university graduates are unemployed.

Hence, Lee said the government still needs to be more focused and assist the unemployment of the country’s fresh graduates.

He said it has been an ongoing and unresolved concern, which is impossible to see improvement in the near term.

As it is, Lee said that the government has already been providing some programmes including Skim Latihan 1Malaysia and Technical and Vocational Education Training Malaysia to accommodate the segment.

BNM stated in its recent 3Q17 report that labour market conditions in the 3Q were supportive of growth.

During the quarter, labour force expansion was relatively matched by net employment gains, resulting in a stable unemployment rate of 3.4%.

Labour demand also improved as the number of vacancies posted on a major job search website increased to 68,794 positions in the quarter, compared to 65,478 positions in 2Q17.

The labour force participation rate in 3Q17 is at 67.9%, rising 0.2% compared to 2Q17.

Another 32.1% of the working age population was outside the labour force.

Malaysian Trades Union Congress president Abdul Halim Mansor concurred that the unemployment rate will likely achieve 3.3% next year due to positive numbers and figures.

However, Abdul Halim is worried for the thousands of new graduates who are entering the job market yearly.

“Where do the new graduates end? We have to really look into this matter to reduce the unemployment rate. “Our graduates are skilled but they are being discriminated as employers prefer to hire foreign workers who are being paid less,” he told TMR.

Abdul Halim said the government should eliminate the discrimination between local and foreign workers in many aspects including minimum wage and annual leave among others.

By doing that, Abdul Halim said the unemployment rate will level, as it is absurd to achieve 3.3% while there are still some unregistered foreign workers in the country.