Malaysians are being more fiscally prudent heading into 2020, choosing to defer spending on discretionary products, according to the latest Consumer Sentiment Index from the Malaysia Institute of Economic Research.
Consumers will be holding back on luxury goods, overseas holidays and leisure outings in 2020, while maintaining spend on necessities such as food, household products and children expenses.
The index saw sentiment at its lowest point, 84, since the fourth quarter of 2017, with 57% of consumers expressing some reservations about their personal finances.
Based off the MIER Index, AllianceDBS Research believes that consumption spending will stay resilient but subdued growth is expected, in line with weak consumer sentiment.
“Nevertheless, we do foresee some positive catalysts, although not substantial, to boost consumption growth next year,” the research firm said in its latest report on the ‘Malaysian Consumer’. “These include a supportive Budget 2020, Visit Malaysia Year 2020 (VMY2020) and recovery of crude palm oil (CPO) prices.”
Speaking to Marketing Interactive, PHD said 2020 is looking better than what consumers experienced in 2019. Cost of living, Malaysia’s financial position, affordable housing and job security are the four most critical areas affecting consumers’ sentiments. A slight majority (51%) of Malaysian consumers are also hopeful that 2020 will be better than 2019.
According to the Ministry of Finance, Malaysia’s economy is estimated to grow at 4.8% in 2020, marginally lifted from 4.7% in 2019. Meanwhile, the unemployment rate will remain at 3.3% and inflation is estimated to be 2%.
The Borneo Post, Marketing Interactive