KUALA LUMPUR, July 29 (Xinhua) — Malaysia’s tight labor market and low inflationary environment will support its positive outlook for consumer spending over 2025, analysts said.
BMI Country Risk and Industry Research said in a note on Monday that it maintained its broadly positive outlook for consumer spending in Malaysia over 2025, with the country’s healthy macroeconomic outlook driving real-term growth in household incomes.
With inflation averaging lower than expected in May, the research house lowered its forecast for headline inflation to an average of 1.9 percent year-on-year in 2025, down from 2.1 percent previously, and only slightly up from an average of 1.8 percent in 2024. This remains low enough to support household purchasing power.
“Overall, we forecast household spending to grow by 3.8 percent year-on-year over 2025, in real terms, to a value of 930.7 billion ringgit (219.79 billion U.S. dollars),” it said.
Looking ahead to 2026, it expects consumer spending to accelerate, underpinned by strong gross domestic product (GDP) growth and a stable employment outlook.
Across the year, it forecasts total household spending growth in Malaysia of 5 percent year-on-year in real terms, taking spending to 977.3 billion ringgit.
Meanwhile, CIMB Securities said in its recent note that it views the Malaysian government’s latest stimulus as incrementally positive for its consumer sector, reinforcing near-term spending.
Malaysian Prime Minister Anwar Ibrahim has earlier unveiled a new round of fiscal support measures aimed at alleviating living costs, stimulating domestic consumption, and boosting household spending.
MBSB Research also said in its recent note that it expects Malaysia’s retail momentum to remain broadly supportive, underpinned by structural tailwinds such as civil service wage hikes, minimum wage adjustments, targeted cash assistance, and the ongoing recovery in tourism activity.
These factors are anticipated to bolster household disposable income and sustain private consumption despite some headwinds from the expanded sales and service tax and electricity tariff adjustments effective July onwards. (1 ringgit equals 0.24 U.S. dollar)
