Malaysia's consumer confidence 'pretty low', says economist

Consumer confidence in Malaysia has improved 10 points from 84 percentage points (pp) in the second quarter of 2016 to 94 in the corresponding period this year, but that's not good enough, said an economist today. 

Senior research fellow at the Malaysian Institute of Economic Research (MIER) Shankaran Nambiar told Malaysiakini this is because Malaysia still lags behind some of its Asean neighbours. 

The findings are from the latest Nielsen Global Survey of Consumer Confidence and Spending Intentions report, which places Malaysia at a "pretty low level", with 94 pp being below the benchmark index of 100. 

Singapore has 89pp, but Vietnam got 117pp, while the Philippines, Indonesia and Thailand, recorded 130pp, 121pp and 107pp, respectively. 

“Taking note that the global average is at 104 and that the Philippines stands at 130, is adequate evidence that while there is some improvement, there is quite a bit of work that is necessary to improve consumer confidence in the country,” Shankaran said. 

Shankaran is the author of “Malaysia in Troubled Times” - a 177-page anthology of articles on the country’s economy from 2014 to 2016 published by the Strategic Information and Research Development Centre.

He was responding to the report published in The Star on Aug 23, which stated that Malaysia's consumer confidence displayed the highest increase across all Southeast Asian countries, and is now at the highest level since 2015. 

The report also stated that the shift is likely a result of the improvement in key economic indicators, a stabilising currency and no major shocks in the system. 

Shankaran said the World Bank's revision of its growth forecast for Malaysia have seen higher export figures and higher current account surplus but have "not yet" done anything to boost consumer confidence. 

He said the report indicates that an overwhelming number of customers have concerns about the state of the economy. 

"Also, the approaching general elections, which must be called by July next year, do not help induce greater certainty.

"The gap between good numbers and consumers' sentiments has to be bridged." - Mkini