The decline in consumers’ finances may be attributed to Bank Negara Malaysia’s decision to raise the overnight policy rate in Q2 2023, says MIER.
The survey indicated a growing sense of pessimism, which is evident in participants’ predictions regarding future employment prospects, income advancement, and anticipated inflation rates. This does not augur well for an economy that is traditionally well supported by domestic consumption.Likewise, the general downtrend is noticeable in MIER’s employment index, showing a decrease of 7.4 points in Q2 to 102.4 points compared to the previous quarter and a drop of 7.
“Furthermore, the constantly elevated inflation level would have raised the cost of living of respondents,” it stated.MIER said business optimism decreased in Q2 2023 as revealed by a decline in indicators for sales, domestic orders, external demand, industrial production volume, and inventory levels. This reversed the positive trend in Q1 2023.
The industrial production index has similarly declined, dropping 8.6 points quarter-on-quarter to 39.2 points in Q2. It dropped 15 points compared to the same quarter a year ago.