MALAYSIANS ENJOYING HIGHER STANDARD OF LIVING
Study shows Malaysians have more disposable income, says expert
MALAYSIANS are enjoying a much higher standard of living than before, said Institute of Strategic and International Studies (ISIS) Economics, Trade and Regional Integration director Firdaos Rosli.
Firdaos said Malaysians had more disposable income and were transitioning from buying locally-made vehicles to foreign ones, besides spending less on groceries and opting to eat out, as highlighted in the 2016 Household Expenditure Survey.
He said data published by the Malaysian Automotive Association found that the sales of midrange foreign car brands, such as Honda, Ford, Mazda and Subaru, registered higher annual growth rates since 2009 compared with local automotive champion, Perodua.
“Recently, goods sold via a popular online trade platform registered sales of over RM100 million on Nov 11 alone.
“(Additionally), Malaysia is the biggest online game market in Southeast Asia, with RM2.45 billion spent in the past 10 months.”
Firdaos dismissed the suggestion that the weakening of the ringgit had negatively impacted how consumers spend, as in the first nine months of this year, Malaysia imported about twice the value of mobile phones (RM6.85 billion) than cars of 1.5to three-litre engines (RM3.47 billion).
“In fact, the value of mobile phone imports is higher than our top food imports, such as rice, milk and cream, coffee, onions and garlic, coconuts, soybeans, corn, milk and cream powder combined.
“By the way, the retail prices of these products are usually much higher.”
He said the strengthening of the US dollar against the ringgit since Sept 2014 had not deterred Malaysians from spending while travelling abroad. “Referring to the latest Bank Negara data, for the first 10 months of this year, the value of transactions of Malaysian credit cards overseas has increased from RM10.9 billion in 2015 to RM12.3 billion in 2016 and RM13.2 billion in 2017.
“In fact, the value of cash advances by Malaysian credit cards abroad spiked by 68.9 per cent this year compared with the same period in 2015.”
He pointed out that transactions and domestic purchases recorded an upward trend, and data suggested that Malaysians were continuing to spend money abroad despite living in a strong greenback era since late 2014.
On Malaysia’s unemployment rate, which had been kept under four per cent (defined as full employment by the Organisation for Economic Co-operation and Development) since 1995, Firdaos said unemployment rate had not breached the four per cent mark despite the slump in gross domestic product (GDP) growth due to the global financial crisis of 2007/2008.
“Last year, Malaysia’s unemployment rate of 3.4 per cent was lower than that of many advanced economies, such as the United States (4.9 per cent), Germany (4.1 per cent) and South Korea (3.7 per cent).”
Even though the price of goods and services had generally risen over the last couple of years, Firdaos said since 2009, the mean monthly household income had increased across the board, with the bottom 40 per cent of household group’s income growing the fastest among other income groups.
On the 1Malaysia People’s Aid (BR1M), which aims to ease the burden of the rising cost of living among low-income earners, Firdaos said Malaysians should recognise two key facts on the initiative; a number of European countries were warming up to the idea of BR1M, but in the form of universal basic income; and BR1M had somewhat reduced income inequality.