KUALA LUMPUR (June 11): A majority, or 82%, of Malaysian consumers are optimistic about the country’s economic outlook and perceive the recent government initiatives, such as the reduction of goods and services tax (GST) to 0% on June 1, as being good for consumers, according to a survey conducted by Nielsen Malaysia.
The survey was conducted on more than 1,000 Malaysians between the ages of 18 and 64.
In comparison to a similar research done by Nielsen in 2015, the survey found that attitudes toward the GST introduction were less optimistic, with over half of Malaysians (58%) believed the tax would be good for the economy.
“While Malaysians were initially tentative towards the introduction of GST three years ago when the tax was first announced, having experienced the effects of the GST over the past three years, they appear to welcome the move to effectively eliminate the tax, perhaps due to the gradual increase in the cost of goods and services that has occurred since its implementation as reflected in the Consumer Price Index (CPI),” said Nielsen Malaysia managing director Raphael Pereda.
The survey showed that over half of consumers (57%) expect the price of goods and services to decrease following the ‘zerorization’ of GST, while one-third (33%) believe that prices will remain at current levels.
According to Pereda, this optimism of Malaysian consumers could mean good news for manufacturers and retailers, with consumer spending intentions likely to rise, which could result in increased sales.
The data showed that two out of three consumers (69%) expect their purchase habits to change following the GST reduction, with close to one-third (30%) saying that they would spend more money on essential items such as apparel and clothing, perishable foods, non-perishable foods and baby products.
The survey also showed Malaysians’ willingness to increase their spending on non-essential purchases such as holidays or leisure trips (33%), new property (27%) and out-of-home entertainment (26%).
Also, one in four consumers (25%) said they will be able to channel their money towards paying off debts once the GST is zero-rated.
Additionally, Pereda believes Malaysian retailers are capturing the overall post-election optimism in Malaysia. “Many retailers have been providing consumers with discounts even before the zero-rated GST was officially implemented to encourage consumers not to postpone their festive spending to after June 1, 2018,” said Pereda.
“If these value-for-money promotions continue, we can expect to see an increase in sales volume compared to previous years,” Pereda added.
The Nielsen survey also showed that 77% of the respondents viewed the government’s initiative to fix the price of fuel as being “good for consumers”.
When asked what they believed the government would do about road tolls in Malaysia, an overwhelming majority (more than 9 out of 10) believed that tolls would either be removed or reduced.
“It is clear that the recent policy announcements made by the government have gained the approval of a vast majority of Malaysians,” said Pereda.
“We are eager to see if this post-election optimism translates into actual consumer spending, which we will be able to determine over time through our retail data.
“Malaysians are currently enjoying a three-month tax holiday, before the SST is implemented on Sept 1,” he added. — theedgemarkets.com