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ASEAN Consumer Sentiment Study 2023 (Malaysia): Growing appetite for sustainable investments
Malaysia is on its way towards economic recovery, having climbed five spots to rank 27th in the world’s most competitive economies in 2023 of this year. At the start of Q4, Prime Minister Anwar Ibrahim had also announced plans to introduce a RM393.8 billion (US$83.4 billion) budget allocation for 2024, the country’s largest to date, in order to achieve 5 per cent economic growth.
According to the ASEAN Consumer Sentiment Study 2023 (Malaysia) report, three in four Malaysians anticipate a recession within the next six to 12 months. Their main financial worries comprise rising inflation and increased household expenses.
Malaysians adjust financial habits amidst recession concerns
Seventy-five per cent of Malaysians foresee a major economic downturn within the next six to 12 months. The looming threat of a recession has made Malaysians primarily concerned about their capacity to put money into savings (34 per cent), afford daily essentials (30 per cent), and maintain their lifestyles (26 per cent). Thus, they are spending less on jewellery, vacations and dining out and more on groceries and utilities, although overall spending on both essentials and non-essentials has decreased from last year.
Malaysia consumers are also now more concerned about finances and their health and well-being compared with 2022, with Gen Y, Mass and Mass Affluent respondents having more health and well-being concerns as compared with last year.
Shifts in spending and financial habits, with more interest in investments than savings
Malaysians are looking towards the future with their financial habits. More than one in three consumers are reducing their budgets for expenses, and more than two in five are maintaining existing budget plans for savings and investments. They are also more inclined to put money into insurance than others in the region.
The survey also shows that respondents from Malaysia are investing more in properties than the rest of the region. Baby Boomers in particular are keen to explore insurance plans, sustainable investments, green loans, and central bank digital currencies.
Malaysians’ strong interest in sustainable investing may be a reflection of the increased concern for health and well-being. Although 58 per cent of Malaysian consumers want to know more about sustainable investing, 87 per cent have cited a need for more sustainable investing solutions in the market. Mass consumers are also seeking more sustainable investing options than other segments.
Digital finance habits and preferences
Malaysia consumers’ financial practices reveal some wariness towards financial technology (FinTech) solutions.
Seven in 10 Malaysians are comfortable with sharing personal data in banking apps, but they are less comfortable than others in the region. Photo: Getty Images
They are less likely than their regional counterparts to track spending using an online banking platform, and more interested in finding financial products that offer deals and rewards. Sentiments may shift due to the intention to develop Malaysia’s National Digital Identity in Budget 2024, which has the potential to simplify and improve FinTech solutions in the country.
Majority value sustainability efforts
Although lower than the regional average, the majority of Malaysians have already adopted sustainable behaviours like using reusable bags, reducing water consumption, switching to energy-efficient appliances, as well as segregating and recycling waste. They are also willing to pay more to buy sustainably produced items, volunteer for, and donate to an environmental organisation.
The government is supporting the push for sustainable practices by encouraging electronic vehicle (EV) uptake. Tax exemptions for excise duty, sales tax, and import tax of components have been extended until 2027, along with full tax exemptions for EV charging equipment manufacturers until 2032. Budget 2024 has also announced the allotment of RM2 billion to the National Energy Transition fund and an investment of over RM170 million to leading EV companies for the installation of EV charging stations.
Malaysia consumers cite good health and well-being (36 per cent), peace, justice, and strong institutions (36 per cent), and reduced inequalities (35 per cent) as the most important sustainability goals for the country. Mass consumers, though, see health and well-being (52 per cent), decent work and economic growth (46 per cent), and no poverty (42 per cent) as more important goals than other subgroups.
Employees are generally satisfied with work conditions
Despite financial concerns and recession fears, employees across all categories are more calm at work than previously reported—a sentiment that may be attributed in part to stabilising work conditions since the COVID-19 pandemic. Two in three Malaysians also expect to be in a financially better situation this time next year, which shows more optimism compared with last year.
Still, of all subgroups, Mass consumers report the highest dissatisfaction with workplace mental health support and have significantly higher stress levels at work. Along with Gen X, they also feel less optimistic about their financial standing in the coming year than other subgroups.
Malaysians see pre-agreed number of work-from-home and work-from-office days (66 per cent), optimal meeting durations (56 per cent), and regular mental health check-ins (47 per cent) as top measures to achieve work-life balance. To improve work-life balance, Malaysian employees would like to see a pre-agreed number of work-from-home days (66 per cent), optimal meeting durations (56 per cent), and regular mental health check-ins (47 per cent).
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The ACSS 2023 reports and infographics are now available for download:
- Consumer sentiments and financial habits
- Sustainable behaviour and sustainable finance
- Employee concerns and expectations
About this study
ASEAN Consumer Sentiment Study (ACSS) is UOB’s regional flagship study analysing consumer trends and sentiments in five countries: Singapore, Malaysia, Thailand, Indonesia and Vietnam. Now in its fourth year, the 2023 survey captures the responses of 3,400 consumers across different demographic groups in this dynamic region. In Malaysia, 600 consumers were surveyed.
Some of the areas covered include:
- Everyday life outlook
- Shifts in spending and financial habits
- Sustainable behaviours and sustainable finance
- Digital payment habits and preferences
Important notice and disclaimers
This article shall not be copied or relied upon by any person for whatever purpose. This article is given on a general basis without obligation and is strictly for information only. The information contained in this article is based on certain assumptions, information and conditions available as at the date of the article and may be subject to change at any time without notice. You should consult your own professional advisers about the issues discussed in this article. Nothing in this article constitutes accounting, legal, regulatory, tax or other advice. This article is not intended as an offer, recommendation, solicitation, or advice to purchase or sell any investment product, securities or instruments. Although reasonable care has been taken to ensure the accuracy and objectivity of the information contained in this article, UOB and its employees make no representation or warranty, whether express or implied, as to its accuracy, completeness and objectivity and accept no responsibility or liability for any error, inaccuracy, omission or any consequence or any loss or damage howsoever suffered by any person arising from any reliance on the views expressed and the information in this article.
