Welcome to Malaysians on Malaysia: Our quarterly report on the Malaysian Consumer Confidence Index (MYCI). Since 2018, this study has reliably elucidated the sentiments of Malaysians, and the 2023 quarter four’s MYCI has recorded a dip to 129 points. But it remains as highest amongst the other years of Q4. Let’s dive deeper into the study.
In this quarter, we heard numerous announcements and initiatives from the government as Malaysia’s economy needed a boost and the rakyat needed a push for digital adoption. Therefore, you see a good climb within the quarter even though there is a slight dip in the MYCI compared to Q3 2023. Here is the Q3’2023 MOM report as a refresher.
MYCI Recorded a Dip and Still Remain Positive Confidence
Q4’2023 MYCI recorded a slight decline at 129 points. During this period there were economic initiatives, such as MADANI 2023, were announced at the end of Q4, and the ever-rising cost of living could have dampened Malaysia’s overall sentiments.
Dampening of Economy Indices
During this quarter, the government has initiated a few initiatives such as MADANI 2023. It has given active communication to the rakyat, but many mention such communication is not seen the same towards our economy. The cost of living continues to rise and is seen to dampen Malaysians’ overall confidence in the country’s economic indices.
Streamlining The Usage of E-Wallet
In the past years, we have seen many e-wallets come and go. The usage remains steady and evolving after a steadfast increase since Q3 2023. The number of e-wallets available has led to consumer streamlining to about 2 e-wallets used on average in Q4 2023 vs 3.0 in Q3 2023.
OPPOTUS – Malaysians on Malaysia 4Q2023.pdf from Oppotus
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2023 has been a good year overall, with MYCI achieving numbers much higher than before, hitting its peak at 140 points during Q3 2023. It has boosted confidence and faith, shaped by the political and economic shifts. But when we look over to Q4 2023, there is a dip in our MYCI score at 129 points.
During this quarter the confidence dropped as we noticed Malaysia’s overall economic growth has dropped too. The leading index (LI) saw a 0.2% decline, it may be due to the unfavourable performance in the number of housing units and real imports of semiconductors according to Datuk Seri Mohd Uzir Mahidin from the Department of Statistics Malaysia (DOSM). He also mentioned Malaysia’s economy is foreseen to maintain its moderate growth supported by the resilient performance of domestic-oriented industries, despite continuing to face the uncertainty of the international market. Despite the downward trends, it is the best Q4 since the inception of this study (2018).
As such, Malaysian Current Financial Well-Being has also been impacted by a slight downward trend at 154 points compared to Q3 2023. The moderate growth in the economy is caused by the persistent crisis with the rising cost of living is placing a strain on workers. Any increase in the cost of living would have a bigger impact on the lower- and middle-income groups as any changes in prices especially essential goods will affect your spending pattern.
Therefore, most of us are having our finances checked across the country. Thankfully, the government acknowledges this crisis – our Prime Minister pointed out that the wage or salary ratio compared to total income was 32.4% in 2022 and they aim to increase it to 45%. The Progressive Wage Policy (PWP) was touted as a solution.
On a positive note, Malaysian financial well-being has been a steady uphill increase since Q4 2022 as it showcases a positive trajectory across 2023.
When the current financial well-being decline, it is not to our surprise that the outlook for the next 12 months is likewise the same. As PWP would need a longer period to kick start and stabilise – its pilot project will only kick in between June and September this year, involving selected companies that voluntarily participate.
Since 2021 the big purchases have always on 3rd quarter and the 4th quarter automatically comes with a dip. This happened in 2023 as well but it is still above Q2 2023 and pre-2022 which we believe the cost of living and the uncertainty of one occupation is taking a toll on most people as the economy is still on a wave.
The struggle in finance automatically impacts the Current State of the Economy at 101 points – to our surprise only Johor’s confidence climbs up. It might be help from our neighbour country (Singapore), as there are a few international singers holding concerts there during the period.
Zooming out to Malaysia’s overall economy which has seen to dip – to help this the Prime Minister (PM) has scheduled the 2024 Budget 3 weeks earlier than originally scheduled.
And the outlook for the economy for the next 12 months does not look positive either. The rakyat is in hopes that the 2024 budget will help the economy and the rakyat to boost confidence, as the government has themed it with “Reformasi Ekonomi, Memperkasakan Rakyat” (Economic Reform, Empowering People).
We wondered how this budget of RM393.8 billion would help the economy as it is the largest yet supply bill to be on the table. PM is looking at a fiscal deficit narrowing to 4.3% of GDP in 2024 and the GDP growth is seen at 4-5% in 2024, the latest estimates are also slightly lower than the regional trend. The initiatives and what’s tabled in the 2024 budget are in the hope of easing inflation. Rakyat mind has been overshadowed by food price concerns, persistently weak ringgit, and looming target fuel subsidy. Moreover, with the uncertain cost of living and job security, the rakyat is hoping for stable economic growth and an improved cost of living.
The ups and downs of the economy do not give people a reason to slow down in their daily lives. Oppotus also dives into sectors such as online shopping, online banking & insurance, e-wallet, travel, and many more.
Online shopping overall had a minor decrease in Q4, but this may be due to the higher purchases done during Q3 as multiple sales were going on. We also notice that the government has announced 10% sales tax on online purchases is only applicable to imported goods valued under RM500. This shall boost the local products as it is not affected by it. During the initial announcement, many were confused and concerned about this implementation.
Q4 is known to be a year-end holiday, therefore with no surprise that Domestic Travel has a good climb as it is a normal trend that we can see in 2019 and 2021. Having domestic travel climbing up, automatically purchasing meal takeaway from convenience stores/petrol marts also has a good impact at 50%. This may be due to the travel by car within the country, hence the stop on such convenience stores/petrol marts is common.
Let’s take a deeper look at e-wallet usage during Q4, there was a small dip on the usage but the average of e-wallet spending has instead at RM343.20. The average spending might be caused by the announcement and claim of the eMadani programme which the government introduced. Many anticipated it as eMadani has an allocation of RM1 billion to benefit a total of 10 million adults from the B40 and M40 categories. It is the latest in a series of e-wallet credit initiatives that have been rolled out.
As many start to consolidate their e-wallet, Touch n’ Go has become the top contender in e-wallet as it is at 93% amongst the rest. The second-tier e-wallets like Boost, Alipay, BigPay and GrabPay, exhibit similar usage patterns and are considerably behind Touch n’ Go in terms of popularity. We also noticed Grab had a huge drop since Q3.
Of course, we would like to know where these e-wallets are being used as well. It has experienced a surge in transactions related to F&B, groceries, bill payments, petrol, and convenience stores (CSV). Since 2021, F&B, groceries and food delivery have always been the main places being used with e-wallets. We anticipate for the coming quarters it will remain the highest used.
Coming to the part of technology, it is something that is constantly improving and evolving. Most people would at least be in touch with it. Let’s look at it, the top 3 trends which are virtual reality (VR), artificial intelligence (AI) and non-fungible token (NFT).
The past months, the government has been proactively pushing for AI in government services. The government have also recently launched the Malaysia AI roadmap to outline how the country’s AI capabilities can be strengthened. Also Budget 2024 has allocated an initial fund of RM20 million to setup the first AI faculty in Malaysia at University Technology Malaysia (UTM).
Cryptocurrency is something that is still ongoing and strong but not as hyped up as when they were launched. The ownership of cryptocurrencies dropped to 30% during Q4, though many are hoping to see an end to this crypto winter in 2024.
Even though the ownership have seen a dip, Bitcoin Cash and Bitcoin remain to be the top type of cryptocurrency owned, respectively at 12% and 10%. This is a global Bitcoin surge as traders “Panic Bought” due to a crypto rally. The rally spread across the broader crypto market, The CoinDesk Market Index (CMI), which tracks a broad basket of tokens, advanced 22% in October. The market capitalization of all cryptocurrencies jumped nearly 19%, it is the biggest increase in crypto wealth.
Note that the opinions presented regarding Malaysia and its people reflect the views of Malaysian citizens aged 18 and above, from both M40 and T20 income segments, residing in key cities of the Peninsular Malaysia and selected in a representative manner.
For a more granular analysis of the data above, we invite you to contact us at theteam@oppotus.com Our team of experts would be pleased to facilitate a comprehensive review and offer customized recommendations tailored to your specific needs.
