Expect consumerfriendly measures in Budget 2021
KUALA LUMPUR: Consumerfriendly measures will continue to be dished out in Budget 2021, given the Covid-19 impact on both businesses and consumers.
RHB Investment Bank Bhd (RHB) believed that as usual, consumer-friendly measures cash handouts, bonuses for civil servants, and income tax relief - will continue to be dished out in Budget 2021.
“This is especially so given the significant Covid-19 impact on both businesses and consumers,” the research firm said regarding the impact of Budget 2021 on the consumer sector.
“Hence, we believe assistance will be extended to lend support to consumer spending and ensure the unemployment rate is under control.
“As such, staple food players should see resilient demand whereas discretionary companies will likely have to improve marketing efforts and product offerings to attract consumers, who will be looking to stretch their ringgit.”
Meanwhile, RHB did not think an excise duty hike is on the cards for either the tobacco or brewery sectors.
It gathered that the former has been suffering from persistently high illicit trade for the past few years, and the excise duty is already one of the highest in the world.
As for the brewers, the research firm noted that business operations and volume were significantly hit by the disruption to on-trade channels and the border closure which has restricted tourist arrivals.
“Hence, an excise duty hike may not effectively raise Government revenue but instead create a better environment for the illicit market to prosper.”