Consumer confidence rises post-GE to highest level in 10 years

By SHAHEERA AZNAM SHAH / Pic By MUHD AMIN NAHARUL

Consumer confidence in Malaysia rose to the highest level in a decade from April through June this year, boosted by the post-general election (post-GE) results and the tax holiday reward by the new government.

According to The Conference Board Global Consumer Confidence Survey, the Consumers’ Confidence Index rose 13 points to 117 percentage points in the second quarter of 2018 (2Q18) compared to the previous quarter. The increase was 23 points higher compared to 1Q17.

The survey, conducted in collaboration with Nielsen Holdings plc, said local consumers were ranked seventh in the confidence survey.

Nielsen Malaysia MD Raphael Pereda said the growing sentiment was attributed to the post-GE optimism, coupled with the zero-rating of the Goods and Services Tax (GST) which began on June 1, 2018.

“The high score propelled Malaysia to become the seventh most confident country in the quarter, up eight spots from the previous quarter.

“In the weeks following the election, there had been a sense of optimism, amplified by the government’s moves to stabilise the prices of fuel and with- draw the GST,” he said.

Pereda added that the overall positive sentiment has translated into a significant year-on-year improvement in the recessionary sentiment, economic outlook and job prospects.

The survey noted that approximately 65% of Malaysians believed the country is currently experiencing a recession, which was a significant declined from the previous quarter.

“Of this, 57% expressed confidence that Malaysia will recover from the recession within the next 12 months, which was significantly more optimistic compared to the sentiment in the previous quarter,” Pereda said.

He said job prospects and national debt remained the top concerns of Malaysians despite the dialled-down anxiety over the local economy.

“While Malaysians see a bright future ahead of them, they are still grounded in reality and continue to express concerns on bread and butter issues. However, the level of optimism is significantly higher than a year ago,” he said.

Pereda added that a majority of Malaysians are expecting their personal finances and job prospects within the next 12 months to remain stable.

The survey noted that Asian consumers are regarded as the most avid savers in 2Q18 as Hong Kong, the Philippines and Vietnam scored the highest among the countries with prudent-spending consumers.

“Singapore, Indonesia, India, Taiwan, China, Malaysia and Thailand rounded up as the world’s top 10 savers. Globally, an average of 53% of consumers said they would save extra cash after spending on essential living expenses.

“43% of Malaysian consumers also said that they would spend their spare cash on holidays or vacations, which was a 2% increase compared to the respondents in 1Q18. Also, 43% of Malaysians said that they intend to use the money to pay off debts,” noted the survey.

The survey measures perceptions of local job prospects, personal finances and immediate spending intentions of more than 32,000 respondents with Internet access in 64 countries.

The consumer confidence levels above the baseline of 100 indicate degrees of optimism, while below 100 indicates pessimism.