Mr & Mrs Malaysia have spent the past three years in desolation since our last update in 2014, but there is an air of optimism in 2017, providing respite from what has been a challenging time for consumers and businesses.
In CLSA’s new proprietary survey, we focus on consumers, and juxtapose our results against 2014 findings in order to provide investors with an accurate gauge of how sentiment is changing. With better scores across the board in 2017, Malaysians are moving ahead with their lives – or aspire to do so – with better economic expectations. This is despite the fact that they believe politics have turned for the worse, with lingering economic inertia.
Conducted in July 2017 with the participation of 2,555 families across demographics and geographies, this survey is the latest installment of our long-running Mr & Mrs Asia series of reports. We aim to unravel the numerous factors affecting the livelihood of an average Malaysian family. We asked them about their opinions and expectations for the economy, politics, discretionary and non-discretionary consumer behaviour on key items such as banking, telecoms, household financial wellbeing and perhaps most vitally their changing spending habits.
The 2017 CLSA survey uncovers a distressing quandary for the incumbent Barisan Nasional party. In 2014, our respondents were still irate following the narrowly-contested general election held in the previous year (which involved allegations of electoral fraud). To our surprise, our 2017 survey indicated greater ire, with the participants holding an even more negative view on politics – a worsening trend which we observed across race, age and income group. The 1MDB scandal undoubtedly plays a part, but equally damaging has been the prime minister’s push for fiscal reform, which has been good for economics, but not as favourable for votes. Curiously, we also observe vital Bumiputera support for the party deteriorating, despite the fact that they are the main recipients of government cash handouts.
It has been difficult for most of the past three years with Mr & Mrs Malaysia impacted by higher taxes and the abolishment of subsidies (see page 31). With the population slowly accepting this as the new way of life, conditions are improving, especially as the government is likely to start offering sweeteners in the near future, given the need to regain popularity for the 14th General Election in 2018. As such, fiscal and monetary policy needs to be accommodative, segueing nicely into a boon for businesses and consumers, whose sentiment has already started to turn for the better.
CLSA survey findings depict improving, albeit cautious, economic confidence across demographics, with Mr & Mrs Malaysia maintaining aspirations of big-ticket purchases. This, coupled with sturdy GDP growth of over 5%, is supported by eagerly anticipated, infrastructure projects, sturdy foreign direct investment from China and a revival of SME-led exports. Thus, the stage is set for a better year ahead, even if politics leaves much to be desired.