Spending

Ipsos poll: Malaysian consumers now fear inflation due to Covid-19, planning spending cuts

Thirty-seven percent of Malaysians said they would spend less on shopping. — Photo by Hari Anggara

By John Bunian

Monday, August 08, 2022 1:28 PM MYT

KUALA LUMPUR, August 8 – Malaysians’ fear of inflation and poverty has overtaken their concern over the lingering Covid-19 pandemic, according to a new Ipsos poll.

The market analysis firm reported that 23% of Malaysian respondents were struggling financially while 45% felt they were barely coping, in the survey of 21,515 adults in 28 countries between the 27 May and June 10.

Beyond the fear of falling into poverty, the proportion of Malaysians reporting living comfortably has also dropped to just 29%, compared to a global average of 49% for all countries surveyed.

Along with worries about inflation, 59% of Malaysians expected interest rates to rise further, while 39% expected it to further hurt their disposable income.

However, 34% of Malaysians thought their standard of living would rise, 32% thought it would stay the same, and 28% said the standard of living was likely to fall.

“Worries about inflation and the cost of living are now widespread, and Malaysians are feeling the pressure on their personal finances. The widely expected rise in interest rates is preparing four in 10 Malaysians for a drop in disposable income in near future, leading to a decline in their standard of living.” Compressed inflation and rising interest rates are impacting consumers’ willingness to spend – a sharp drop in Malaysians’ comfort in shopping domestic and larger indicates that they may need to prioritize what they choose to spend in the short term,” Lars Erik Lie, associate director of Ipsos Public Affairs, said in the report.

The report also indicates that there has been a steady improvement in consumer purchase intent for major purchases such as homes and automobiles from July 2021, but this appears to have reversed after a decline in 10 points in the last two months.

Of the spending they would cut if the price increased, 45% of Malaysians said they would spend less on socializing and 42% said holidays.

Another 38% said they would delay major purchases while 37% said they would spend less on purchases.

“For many Malaysians, spending on socializing and holidays are the first to be reduced with the tightening of household budgets. Delaying major purchases and reducing household purchases follows, before touching on food expenditures or dipping into savings,” Lie added.

The survey also showed that 31% of Malaysians are willing to reduce food spending if prices rise and 25% said they would use cars and motor vehicles less to save on fuel costs.