10th August 2022 - 3 min read
A study by a market research company, Ipsos, has revealed that almost 70% of Malaysians are feeling the effects of the rising inflation in the country. The study also noted that compared with most major economies in Asia and the West, significantly fewer Malaysians said that they are living comfortably these days.
In the study titled “Malaysians Tighten Their Belts As Inflation Eats Into Income”, 45% of a total of 500 respondents said that they are just getting by in recent months, while 23% of them are finding it quite or very difficult to manage their finances. Only 29% of the respondents said that they are living comfortably or doing okay.
According to the study, inflation and poverty were cited as the primary concerns among Malaysians, especially as the country is still recovering from the impact of the Covid-19 pandemic.
To cope with the situation, many of the respondents said that they will likely scale back on their expenses, especially on non-essential items. 31% of them said that they will spend less on food, while 25% of them shared that they will use their vehicles less to save on fuel costs.
Moreover, 45% of the respondents stated that they will likely reduce their expenses for socialising, while 42% of them will spend less on holidays. The study also indicated that Malaysians are more willing to delay big purchases rather than cut back on necessities. It was further noted that consumer intent to purchase big-ticket items, such as houses or automobiles, had dropped 10 points between May and June 2022.
With the rising inflation, 59% of the respondents also believe that loan interest rates will further increase over the next year, while 21% of them think that the interest rates will remain the same. 11% of them are of the opinion that the interest rates will fall.
Additionally, as much as 39% of the respondents expect their disposable income to drop over the next year, while 20% of them indicated that their disposable income will remain unchanged. Of the total respondents, only 35% expect their disposable income to increase over the next year.
“[A] widely expected increase in interest rates is preparing 4 out of 10 Malaysians for lower disposable income in the near future, resulting in a fall in their standard of living,” remarked the associate director of Ipsos Public Affairs, Lars Erik Lie, adding that the increase in inflation and interest rates are impacting consumers’ willingness to spend, causing them to be more selective about what they choose to spend on in the near future.
The study by Ipsos is conducted monthly in 28 countries around the world via the Ipsos Online Panel system. Besides Malaysia, other countries that are involved in the study include China, India, Australia, South Korea, Japan, the United States, and the United Kingdom. The survey involves a total of 21,515 adults aged between 16 to 74, with 500 Malaysians sampled monthly.
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