MONEY MASTER

Malaysia’s retail sector delivered a softer-than-expected start to 2026, with  slowing consumer spending prompting a downgrade in full-year outlook , highlighting growing pressure on household purchasing power. Retail Growth Falls Short Despite Festive Boost Retail sales rose  3.7% YoY in 1Q2026 , below expectations of  4.4% , despite support from: Chinese New Year and Hari Raya  festive spending RM4.6 billion in government cash aid The weaker-than-expected performance suggests that  cost-of-living pressures are outweighing seasonal demand support . Full-Year Outlook Cut on Weak Consumer Sentiment Retail associations lowered their  2026 growth forecast to 3.8% (from 4.0%) , citing: Middle East conflict impacting inflation Rising costs eroding  consumer purchasing power Key point: Slower retail growth reflects cautious consumer behaviour amid inflation and geopolitical uncertainty. Tourism and Fiscal Support Provide Partial Cushion Malaysia attracted...

The Madani Government has demonstrated its commitment to addressing the cost-of-living challenges faced by Malaysians through an enhanced  Sumbangan Tunai Rahmah (STR)  initiative. With an allocation increase to  RM13 billion  in Budget 2025, up from RM10 billion previously, this marks the largest funding boost for STR to date. Supporting Households Amid Rising Costs Economist  Prof Dr Barjoyai Bardai  from Malaysia University of Science and Technology emphasized the importance of STR in easing financial burdens for households. While the aid may not cover the full cost of living for families—estimated at over RM3,000 monthly—it provides meaningful support to supplement household incomes. Sustainable Aid Mechanism Proposed Barjoyai suggested creating an  endowment fund  through a social security institution capable of generating annual income. This mechanism would ensure sustainable STR funding, reducing reliance on annual government budgets. Expan...

 The  Ministry of Energy Transition and Water Transformation  announced that  electricity tariffs  in  Peninsular Malaysia  will remain unchanged from  Jan 1 to June 30, 2025 . Key Points Base Tariff Maintained : The government will retain the  current base electricity tariff  during this period. Imbalance Cost Pass-Through (ICPT) : No changes to the current  rebate and surcharge rates  under the  ICPT mechanism . Impact : Ensures stability for households and businesses, avoiding additional financial burdens in the first half of 2025.

The Malaysian government is set to launch a Cost of Living Indicator (IKSH) to design more targeted subsidy programmes tailored to the specific needs and spending habits of Malaysians, according to Datuk Armizan Mohd Ali , Minister of Domestic Trade and Cost of Living (KPDN). Key Highlights Purpose of IKSH Refines subsidy programmes to ensure aid reaches those most in need. Enhances both existing and future initiatives for better planning and execution. Budget Allocation RM700 million allocated under Budget 2025 to implement new measures aimed at easing the cost of living. Supports region-specific programmes and improves current initiatives for target groups. Targeted Subsidies and Costs Addressing concerns over targeted diesel subsidies, the minister noted that price increases are driven by demand and supply factors , not subsidies. Stakeholders are encouraged to report any suspected price hikes related to subsidies for investigation. Goals of the IKSH Focuses on addressing basic n...

US consumers’ expectations for inflation over the next year dropped for the second month in a row in June. According to a Federal Reserve Bank of New York survey, consumers now anticipate prices to rise by 3% annually, down from 3.2% in May. This decline brings short-term inflation expectations back to the levels seen from December to April, before they increased to 3.3%. The survey also showed that consumers expect home prices to increase by 3% over the next year, down from 3.3% in May. Additionally, consumers foresee slower rises in the costs of gas, food, medical care, and rent over the next 12 months. A report due on Thursday is expected to confirm that the core consumer price index, excluding food and energy, rose by 0.2% in June, marking the smallest back-to-back gains since August. In the longer term, the survey revealed a slight increase in the three-year inflation outlook to 2.9% from 2.8%, while the five-year expectation fell to 2.8% from 3%. Key Takeaways: Inflation Expectat...