Moderation in consumer spending expected in Malaysia

Higher electricity tariffs and the price of natural gas are likely to amplify the effects of increasing energy prices on consumer price index growth in the second half of 2014, with consumers also worrying about the introduction of the GST on April 1, 2015.

PETALING JAYA: Rising inflationary pressure due to further subsidy rationalisation is expected to subdue domestic demand growth in the second half of 2014, say economists.

According to Malaysian Rating Corp Bhd (MARC), external demand will be key to stronger headline growth in 2014 and that although domestic demand will lend support, it will, however, be to a lesser degree due to the expected build-up in inflationary pressures in the second half of the year.