KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Spending to See Strong Growth
BMI expects Malaysian consumer spending to rise 3.8% in 2025 to MYR930.7 billion, followed by 5.0% growth in 2026 reaching MYR977.3 billion. This rebound brings spending close to pre-Covid growth levels, supported by a healthier labour market and monetary easing.
Low Inflation and Rate Cuts Support Demand
Headline inflation is forecast to average 1.9% in 2025 and 2.2% in 2026, providing households with stronger purchasing power. June 2025 inflation slowed to 1.1% YoY, the lowest since February 2021. Bank Negara Malaysia’s 25bps rate cut in July 2025 to 2.75% — the first in five years — is expected to ease borrowing costs and encourage spending. Another rate cut to 2.50% is projected by end-2026.
Labour Market Strengthens Purchasing Power
Unemployment remains low at 3.0%, its best level in a decade, and is forecast to average 3.1% over 2025–2026. Combined with a stronger ringgit (forecast MYR4.3/USD in 2025), households are expected to see real wage gains, with purchasing power 7% higher than 2019 levels.
Household Debt Still a Concern
Malaysia’s household debt stood at 69.5% of GDP in late 2024. While rate cuts will reduce debt servicing costs, any sudden inflation spike may force BNM to tighten policy again, squeezing disposable income.
Mixed Consumer Sentiment
Consumer confidence slipped to 87.1 in Q1 2025, while retail sales growth slowed to 4.9% YoY in May, showing pressure on low- and mid-income households from food and fuel prices.
Global Risks Could Weigh on Spending
Trade tensions, tariff disputes, and supply chain disruptions remain key external risks. Any slowdown in global growth or prolonged geopolitical uncertainty could dampen Malaysia’s consumer sector despite the positive domestic outlook.
Outlook
BMI maintains a broadly optimistic view for 2025–2026, with strong labour market conditions, low inflation, and monetary easing driving spending. However, household debt and global uncertainties remain crucial factors to watch.
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