Consumerism sees efforts to spur consumption, improve sentiments

AT the heart of Budget 2018, analysts believe that spurring private consumption remains key to boosting Malaysia’s economy.

AffinHwang explained, “As rising cost of living remains a concern, expectations are that the 2018 Budget proposals will be generous, with cash assistance for the people, especially the lower income households.

“This will likely include measures such as the extension of 1Malaysia People’s Aid (BR1M), where cash assistance of RM1,200 to households with a monthly income of below RM3,000, remaining the same from the 2017’s allocation of equal amount.”

For the medium income group earners, there is a possibility for the government to cut personal income tax rate in Budget 2018.

Based on new tax reliefs announced during Budget 2017, AffinHwang believed that Budget 2018 could also see a few new tax exmptions.

“With a possible personal income tax cut, we also expect the government to provide additional personal income tax reliefs for spouse as well as relief for children. At the same time, the government may relook and include some tax reliefs, which have been left unchanged for few years, such as tax relief on life insurance premiums as well as other premiums paid on education and medical policies,” it said.

Another possible measure to boost private consumption could be on the targeted fuel subsidy proposal, AffinHwang added.

“In the past, the government had indicated that the targeted fuel subsidy was being studied. However, with the global oil price increasing and hovering around US$50 to US$55 per barrel, leading to higher domestic retail fuel prices, we believe that the government will begin to relook at the targeted fuel subsidy, especially for low income households,” it opined.