Group: Insufficient policies to increase retail spending
PETALING JAYA: The latest budget announcement is not expected to stimulate consumer spending in the near term, as there are insufficient economic policies aimed at increasing retail spending, opined retail consulting firm Retail Group Malaysia.
Managing director Tan Hai Hsin told SunBiz that Budget 2019 is focusing more on managing government deficit and social programmes for the B40 group.
“We hope the economic activities will improve significantly in the immediate future. Higher economic activities will lead to higher take-home pays (and higher retail spending subsequently),” Tan said.
Prior to the Budget announcement, he said Malaysian consumers were told that they should not expect monetary incentives from the government in 2019. Malaysians were also informed that more taxes could be expected next year.
“Based on the latest announcement, it should improve consumer confidence. At least in the next six months,” said Tan.
For next year, the government continues to distribute one-off monetary incentives to Malaysians (including civil servants) to reduce their financial burden. About 4.1 million households are expected to benefit from it.
Increment of minimum wage by RM50.00 will also lessen the financial burden of B40 group.
“On the other hand, higher minimum wage will lead to higher cost of goods for retailers. It will lead to higher retail prices eventually.”
He said the soda tax will not have major impact on retail spending, while noting that it is still early to comment on the impact of RON95 until more announcements have been made.
“Same as previous budgets for many years, there were no direct incentive and new government policies related to retail industry.”
Sunway Malls & Theme Parks Chan Hoi Choy said the 2019 Budget balances fiscal discipline while emphasising development in the right sectors.
“Initiatives announced particularly with the emphasis on B40 group is lauded while efforts to grow Industry 4.0 especially knowledge transfer, artificial intelligence development, matching grants will drive higher productivity and cost rationalisation in mall & retail industries.”
Similarly, it is encouraged by the government’s focus in housing, public transportation and education initiatives to form the bedrock for Malaysia’s economy into the future. The drive for greener adoption and women representation also signifies a greater sustainable and inclusive approach.
“We take note of the significance of Malaysia’s economy projected GDP growth rate of 4.8% for 2018 and 4.9% for 2019, against IMF’s projected slowdown of global growth of 3.7% in 2019. This underscores the relative resilience of the Malaysian economy in face of global headwinds and protracted trade war. In the light of this and the current country’s fiscal position, the overall Budget 2019 is targeted while exercising prudence,” said Chan.