Malaysians spending habits


  • Business
  • Saturday, 01 Mar 2003

MALAYSIANS spend a high percentage of their household income on food, groceries and personal care items, ranked joint third among the ten important economies in the Asia-Pacific region minus Japan. 

The high percentage of spending on essential products among Malaysians, and countries with a similar high percentage, has a correlation with such countries' per capita income. 

The high percentage of spending on essential items, plus the amount households spend on monthly payments for houses, cars and credit cards, could indicate that discretionary spending is limited. 

PURSE strings of all Malaysian households are being tugged the hardest by hypermarkets, followed by supermarkets and the traditional grocery store. 

The pattern, however, differs among the income groups. The low-income group, categorised by household income of up to RM1,500 per month spends most of their money in supermarkets, followed by the traditional grocery store. 

The medium income group, where household income is between RM1,501 and RM3,000 per month, spends most of their money at hypermarkets, followed by supermarkets and the traditional grocery store. That pattern of spending is emulated by the high-income group, which has household income of more than RM3,000 per month. 

It would be interesting to see whether the spending patterns does change with rising per capita income of Malaysians. If it does, then the smaller retailers could be under some pressure from migrating spending habits. 

MALAYSIA'S gross domestic produce (GDP) during the fourth quarter ended the year on a bright note with all sectors of the economy posting positive growth. This contributed to the economy posting a growth of 5.6 per cent during the fourth quarter and an overall growth of 4.2 per cent for the whole year. 

While growth rates are in positive, three of the five sectors of the economy posted slower growth in the fourth quarter compared with the third quarter. The sectors that showed higher growth are mining, thanks to petroleum, and services. 

Economists wonder whether the growth momentum, which has slowed slightly in the fourth quarter, would be sufficient to see the economy ride through the current tough patch in the global economic environment. Many say that growth in the first half of the year may be compromised by dismal global sentiment but should pick up in the second half with the government's fresh stimulus package working its way through the economy. 

INVESTMENT, whether we like it or not, is a mainstay of the economy. It leads to job and wealth creation, and provides the economy with a base to grow in the future. 

Gross fixed capital formation in Malaysia has gone through a rough ride over the past two years. Investment figures have not been encouraging but sluggish economic growth and low capacity utilisation rates both globally and domestically over the past two years would have contributed to companies holding back, or being more cautious, on future investment plans. 

Growth rates may have increased during the fourth quarter but that was in part due to the low base effect. With the government firmly pushing investments in Malaysia, the next course would be for private companies to raise investments; something not easily done considering much of the world's investment money is now flowing into China. 

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