In Malaysia, the factors for inflation are multi-dimensional. Malaysia has managed to keep inflation at a relatively low level, 4.5 % in September 2022, compared to its regional peers. The subsidies and price controls have kept inflation in check to a large degree. If these direct interventions were absent, the current inflation rate of Malaysia could be twice as high. As with other countries, Malaysia's inflation rate is calculated as the change in Consumer Price Index (CPI) from one year to the next.
However, working-class Malaysians perceive that the CPI index value is out of sync with the steep price increases they are encountering, especially in food. They lament that the CPI value in Malaysia does not reflect realities on the ground, and therefore needs a review. As such, the Statistics Department has started to review the calculation of CPI for a better picture of inflation.
Most Malaysians are anxious about rising prices, and it is strongly felt in daily life, especially when buying essentials or dining out. They turn to social media to vent frustration about the rising prices, particularly towards restaurants and supermarkets.
Despite this, it’s interesting that the services sector in Malaysia hasn’t displayed the typical signs of an inflationary-driven slowdown.
Visually, there doesn’t appear to be much slackening or consumer belt-tightening. On the contrary, shopping malls and restaurants are thriving, and highways are busy during holidays. In the country’s urban regions, you will not be able to get a sense that the country is experiencing inflationary pressures.
The pandemic and the uncertainties, anxiety and hardship it brought appears to have caused a shift in societal psyche, where leisure and some indulgence is given precedence over more prudent spending
If anything, the long restaurant queues and large crowds in shopping malls, cinemas, and holiday destinations indicate robust consumer spending.
Malaysians' appetite for fulfillment has increased, and they do not seem to be holding back on leisure despite rising prices. The current spending behaviour indicates more Malaysians are focusing on shared experiences and leisure. They are diverting expenditure away from big-ticket purchases towards more quality of life and sensory experiences. A come-what-may attitude seems to have surfaced in the wake of the pandemic and the growing anxiety about uncertain futures. The uncertainties, anxiety, and hardship that the pandemic brought appear to have caused a shift in the societal psyche, where leisure and some indulgence are given precedence over more prudent spending.
Even so, many Malaysians have maintained prudent spending compared to the younger generations entering the workforce. The depth of concern about inflation appears to slide with age. The younger generation tends to emphasize leisure and short-term gratification over savings and debt pragmatism. With more millennials and gen Z entering the Malaysian workforce and earning money, there has been a proportionate rise in spending in restaurants, cafes, bars, and holiday destinations. Popular establishments, even on weekdays, are packed to the brim.
Unfortunately, the rising costs highlight the increasing disparity in the quality of life and wealth gap across the social classes in Malaysia and even in other nations. This disparity is even more glaring as depicted in social media, where people share stories and compare lifestyles. People are also increasingly engaging online with social and political opinions. As Malaysia just recently wrapped its general elections, it is uncertain how all this will play out, but what is clear is that the focus on any new government should be on alleviating the impact of inflation. In the meantime, Malaysians are exercising prudence in their spending but not holding back on things that give them joy. Borrowing from the Marie Kondo’s principle, "buy only those things that speak to your heart."
Table of content
- Feeling the pressure: Context
- Understanding human psychology during the polycrisis
- Has disruption become the new normal?
- The Indian consumer's response to inflation
- Turkey: Re-designing adaptation in the shadow of hyperinflation
- Brazil: Downsizing VS price rises- making the right choice
- Malaysia: Between money well spent and life well lived
- Understanding Argentina
- France: The end of recklessness
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