ASEAN KEY DESTINATIONS
Consumer confidence at 10-year low in Malaysia
The Malaysian consumer confidence index has fallen 11 percentage points to a 10-year low of 78 percentage points in the third quarter compared with the second quarter, according to Nielsen’s online survey.
Based on the global performance management company’s poll, Malaysian consumers’ main concerns are the economy, political stability and job security. “Nearly nine in 10 Malaysians feel the country is currently in a state of recession,” said Nielsen in a statement.
The respondents are more concerned about the nation’s financial conditions at 61% compared with 43% in the second quarter while a third of the respondents said political stability was the second most worrying at 34%, an increase from 13% in the last quarter.
Nielsen Malaysia’s country manager Richard Hall said: “The declining value of the ringgit also contributed to the concern of the country’s economic state.
“If the ringgit continues to remain at a low, then we foresee that consumer confidence will remain at its current level, going forward.”
“In Malaysia, the currency devaluation of at least 25% has potentially impacted the general perception of the economic strength of the country, while the actual impact in terms of rising prices due to import costs has not yet hit the consumers’ pockets,” said Hall.
Inter-Pacific Securities research head Pong Teng Siew said the country was definitely not in a recession as only selective areas of the economy such as retailing and property were slowing down.
He said consumers, especially those living in the Klang Valley, feel the pinch as living costs increase while their purchasing power reduce and that could lead to the perception.
“But that does not represent the living cost in other areas of the country.”
Pong pointed out that the financial and services sectors were growing albeit at a slower pace. The export market and manufacturing were also resilient.
Malaysia’s consumer confidence level is also the lowest compared with other South-East Asian peers.
Confidence levels in South-East Asia remain relatively high, with five out of six countries in the region scoring above the 100 percentage points mark, Malaysia being the exception.
It was led by the Philippines at 117 percentage points, Indonesia at 116, Thailand at 111 and Vietnam at 105.
Globally, confidence recorded 99 percentage points for the same quarter.
Consumer confidence levels above and below a baseline of 100 indicated degrees of optimism and pessimism, Nielsen said.
In Nielsen’s survey, Malaysian consumers are putting their spare cash into savings, paying off debts and spending on holidays.
The Nielsen Global Survey of Consumer Confidence and Spending Intentions was conducted between August 10 and September 4, polling more than 30,000 online consumers in 60 countries.
In Malaysia, the sample size is 541.
Interestingly, this survey mirrors the Malaysian Institute of Economic Research’s findings that the consumer sentiment index had fallen to a trough in the third quarter.
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