Urban households spend 1.6 times more than rural counterparts

by NUR HAZIQAH A MALEK/ pic by ARIF KARTONO

THE household consumption expenditure in urban areas is 1.6 times higher versus those in the rural area for the year 2019, in line with the increase of mean household income for households.

Statistics Department chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the mean income of urban households stood at RM8,635, which is 1.7 times higher than those of rural households (RM5,004).

“Cost of living relatively varies between states due to differences in commodity prices, household income levels and the ability of households to cope with rising prices.

“Household expenditure in urban areas increased by 3.7% per annum from RM4,402 to RM4,916, meanwhile in rural areas, it increased by 3.6% annually from RM2,725 to RM3,038 for the period between 2016 to 2019,” he said in the report released last Friday.

According to the figures reported by the department, the national mean monthly household consumption expenditure had risen to 3.9% per annum, in tandem with the growth of mean monthly household income at 4.2% from 2016 to 2019.

In terms of value, the national mean monthly expenditure has increased to RM4,534 from RM4,033 for the aforementioned period.

At state level, the highest mean monthly household consumption expenditure was recorded in Putrajaya at RM7,980 last year exceeding the national mean of RM4,534.

Five other states also exceeded the national mean, with Kuala Lumpur at RM6,913, followed by Selangor (RM5,830), Melaka (RM4,955), Johor (RM4,793) and Penang (RM4.630).

Additionally, Mohd Uzir added that the composition of expenditure groups shows differences in preferences by the level of urbanisation.

“Households in the urban areas recorded the highest percentage of expenditure in housing, water, electricity, gas and other fuel at 24%.

“Meanwhile, the highest expenditure of households in rural areas was in the food and non-alcoholic beverage expenditure group (24.4%),” he noted.

Dominating household expenditure were basic necessities: Housing, water, electricity, gas and other fuels at 23.6%, followed by food and non-alcoholic beverage (17.3%), restaurants and hotels (13.9%), and transport (13.5%), having all contribute 68.3% to the total household consumption expenditure.

Other main groups of expenditure include clothing and footwear, communication, health and education.

Mohd Uzir said in line with the national development, the composition of expenditure for both health and education rose by 0.2% in 2019.

“The expenditure patterns for the other four groups which comprise the bulk of selected goods have also increased as household income increases.

“The miscellaneous goods and services group and recreation services and culture group increased by 0.3% and 0.1% respectively, while furnishings, household equipment and routine household maintenance group also increased by 0.2%,” he noted.