MARC: Ex­cess in­come grows at slower pace

The Sun (Malaysia) - - SUNBIZ -

PE­TAL­ING JAYA: Malaysian Rat­ing Corp Bhd (MARC) es­ti­mates that av­er­age monthly house­hold ex­cess in­come grew at a slower pace of 6.6% in 2016 from a cycli­cal high of 7.7% in 2013.

“Sim­i­larly, on an in­fla­tion ad­justed ba­sis, the growth of monthly house­hold ex­cess in­come mod­er­ated to 6.6% dur­ing the same pe­riod, down from an av­er­age of 7.1% in the three-year pe­riod through 2015,” the rat­ing agency said in a note yes­ter­day in re­sponse to the re­cent sta­tis­tics on house­hold in­come and ex­pen­di­ture.

MARC said con­sumers have been cau­tious in their spend­ing habits amid a chal­leng­ing eco­nomic en­vi­ron­ment as well as ris­ing costs of liv­ing.

“Not sur­pris­ingly, pri­vate con­sump­tion growth has been sub­dued, av­er­ag­ing at 6.3% be­tween 2014 and 2016, down from 7.5% in the pre­ced­ing three-year pe­riod.”

Malaysia’s me­dian and mean house­hold in­comes con­tin­ued to grow, ben­e­fit­ting from the rel­a­tively re­silient do­mes­tic econ­omy. In par­tic­u­lar, the me­dian monthly house­hold in­come grew 6.6% per an­num on a com­pounded an­nual growth rate (CAGR) ba­sis be­tween 2014 and 2016, in line with the av­er­age nom­i­nal gross do­mes­tic prod­uct (GDP) growth of 6.5% dur­ing the pe­riod.

Sim­i­larly, the mean monthly house­hold in­come rose by 6.2% per an­num on a CAGR ba­sis in the same two-year pe­riod.

None­the­less, both the me­dian and mean monthly house­hold in­comes growth have slowed from the pace recorded in the pre­vi­ous sur­vey (11.7% and 10.3% re­spec­tively in the 2012-2014 sur­vey). Both mea­sures were also lower than the in­creases recorded in the sur­vey dur­ing the 2009-2012 pe­riod.

MARC said this slower pace can be pos­si­bly at­trib­uted to the chal­leng­ing do­mes­tic and global eco­nomic en­vi­ron­ments post the global fi­nan­cial cri­sis, col­lapse in in­ter­na­tional crude oil prices, de­pre­ci­a­tion of the ring­git as well as weaker global trade per­for­mance dur­ing the pe­riod.

How­ever, it said more im­por­tantly, the incidence of poverty has de­clined sig­nif­i­cantly, with the poverty rate slip­ping fur­ther by 0.2 per­cent­age points to 0.4% from 0.6% in 2014, which can be at­trib­uted to in­come trans­fers from the gov­ern­ment, which di­rectly ben­e­fited the B40 in­come group.

From a regional per­spec­tive, it said Malaysia has done a rel­a­tively cred­i­ble job in im­prov­ing over­all in­come dis­par­ity, with a lower Gini Co­ef­fi­cient than some ad­vanced economies such as Sin­ga­pore (0.458) and Hong Kong (0.539).

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