Significant Income Growth For Malaysian Households
Jun 16, 2023
Research conducted recently by Fitch Solutions has brought forth good news for Malaysians households and businesses. The Fitch Solutions Country Risk and Industry Research said household disposable income had grown beyond pre-pandemic levels of RM98,300 per household in 2019.
According to research by Fitch Solutions, it is said that Malaysian households will see significant growth in their disposable income for the rest of the year and up until 2026. While inflation is expected to increase this year at an average of 3.3%, it said, this will be significantly below the rate of disposable income growth of 7.2%. Disposable income growth in 2023 will slow but still remain above the inflation rate.
“This will remain the case in 2024, with the trend of household disposable income outpacing inflation maintained throughout our forecast period to 2026. This means consumers in Malaysia will see their disposable incomes increasing in real terms,” it said in a statement.
Currently, recreational and cultural spending was the fastest growing category, followed by restaurants and hotel. “These growth outlooks indicate that while Malaysian consumers are spending more on discretionary spending than they did during or before the pandemic, they are focusing that spending on experiences rather than tangible products.”
“We believe the continuous strong growth of the spending category in the long term is aided by a growing middle class and high-income households in Malaysia, as well as positive demographic shifts that will drive demand for recreation and cultural experiences,” it said.
“Fashion retailers can benefit by having their stores near recreation or tourist spots in order to capitalise on the strong surge in recreation and culture spending over the medium term. As discretionary spending levels rise in Malaysia, retailers can ride the momentum by ensuring their brands are seen at high foot-traffic tourist spots, particularly as domestic social restriction orders ease and international tourism reopens,” it said.
Source: Free Malaysia Today