Malaysians starting to feel pinch of inflation

SHAH ALAM - Malaysians are now starting feel financial pressure with 45 per cent admitting that they are living on the breadline.

According to a report released on Monday by Ipsos, a market search company, this was following concerns of inflationary pressure and the increase in the cost of living.

Ipsos public affairs associate director Lars Erik Lie said the expected increase in interest rates will also affect four out of 10 Malaysians.

"The most significant impact is in the form of low disposable income in the near future, causing a decline in their standard of living.

"Pressure due to inflation and rising interest rates will also cause a sharp drop in willingness on household spending or making large purchases,” he said.

Erik Lie said in facing such situations, most Malaysians would take the approach to cut down on their expenses on socialising and vacations to reduce household expenses.

The Ipsos report also revealed that the number of Malaysians who claimed that they were living comfortably was also very low compared to other major economies which was only 29 per cent compared to 53 per cent in India, 42 per cent in South Korea and 40 per cent for the global average.

As of July this year, 42 per cent of respondents also agreed that inflation was the main concern, followed by the issue of poverty with 35 per cent and the Covid-19 pandemic by 24 per cent.

"The purchasing trend among the people have also started to decline over the past two months, with only 32 per cent of respondents agreeing that they are comfortable purchasing major items such as houses and cars in June, compared to 40 per cent last May.

"For household budget, expenses for socialising and vacations are among the first things to be cut down," he said.