Private consumption growth faces headwinds

KUALA LUMPUR: There are potential headwinds that could moderate private consumption growth in Malaysia to around 6.5% in the second half of 2022 (2H22) and 2023, according to UOB’s Global Economics and Markets Research unit.

It said higher global uncertainties, rebalancing of household expenditure amid weaker household balance sheet, expiry of pandemic policy measures by mid-year (such as lower Employees Provident Fund or EPF employee contribution rate, special EPF withdrawal facility, special financing assistance, and exemption of sales and service tax for vehicle purchases), coupled with higher cost of living and interest rates, could restrain the strength of private consumption.