Malaysians ‘tighten their belts’ as inflation eats into income, Ipsos says

Majority of Malaysians are finding it difficult to manage financially or feel they are just getting by

by NURUL SUHAIDI / pic MUHD AMIN NAHARUL

Ipsos’ study revealed that inflation and poverty have eclipsed the pandemic as the main things Malaysians worry about.

Its inaugural study “Malaysians ‘Tighten their Belts’ as Inflation eats into income”, found that majority of Malaysians are finding it difficult to manage financially or feel they are just getting by.

Significantly fewer Malaysians claim that they are living comfortably these days compare to most major economies in Asia and the West.

With inflation continuing to be a concern, Malaysians expect further increases in interest rates and the majority now foresee that their disposable income won’t improve over the next year

Based on a poll conducted in 28 countries, the intent for large purchases like homes or cars has increased steadily since July 2021, but it appears to be reversing itself and decreased by 10 points in the last two months.

This also indicates that Malaysians are willing to postpone making larger purchases, if necessary, rather than reducing their spending on basic necessity. 

The same also applied to cutting off their spending on holiday and social activities and over 40% participants agreed to do so.

Ipsos Malaysia Public Affairs associate director Lars Erik Lie said the concern about inflation and the cost of living is now widespread, and Malaysians are feeling the squeeze on their personal finances.

“Widely expected increase in interest rates is preparing four out of 10 Malaysians for lower disposable income in the near future, resulting in a fall in their standard of living,” he added.

The squeeze from inflation and rising interest rates is impacting consumers’ willingness to spend.

“As a result, Malaysian’s confidence in comfort with making both household and larger purchases decline, which indicate that they may need to prioritise what they choose to spend on in the near future.

“For many Malaysians, spending on socialising and holidays is the first to be cut with the household budget tightening. Delaying large purchases and reduced household shopping follow, before touching expenses on food or eating into savings,” the study showed.