THE prolonged lockdown and financial concerns have turned Malaysian consumers into cautious spenders during the Covid-19 pandemic, a consumer body said.

Malaysian Digital Economy Consumer Association secretary-general Mohd Shani Abdullah said these spending habits are dampening the country’s economy.

“Consumers among the B40, especially daily wage earners without government assistance, have been thrifty throughout the pandemic.

“The M40 may still be employed, but their spending power has been eroded due to the extended lockdowns. They are more cautious with expenses as their household economic security is no longer guaranteed during the pandemic,” Shani told The Malaysian Insight.

There are ways the government can help households regain financial confidence, which would, in turn, help to boost medium-term consumer spending, he said.

These can be in the form of various fee deductions, free public transportation and unlimited Internet packages as most people are now working from home. Cheaper or unlimited data packages will also directly help e-hailing and delivery riders with low income get more out of their wages.

Shani’s other recommendations are to defer and reschedule to the following year all utility bills and income tax payments. He also called for an automatic moratorium for all loan instalments.

“These actions will give consumers the confidence to plan their spending in these challenging times.

“All forms of current savings now will translate to additional spending into the national economy and act as a stimulus,” he said.

When the third lockdown from June 1 to June 14 was announced, Prime Minister Muhyiddin Yassin unveiled a RM40 billion stimulus package called Pemerkasa Plus to mitigate the impact of the lockdown.

Under this package, RM2.1 billion will be distributed to lower-income households earning less than RM5,000 per month, while an optional loan moratorium is offered to the B40 group and people who have lost their jobs, as well as micro-entrepreneurs and small- and medium-sized enterprises (SMEs) that are not able to operate during the lockdown.

The lockdown has now been extended for two more weeks and is expected to end on June 28.

Although the government has also announced a four-phased national recovery plan to exit the lockdown, there is still uncertainty as the plan depends on three key indicators: the number of new Covid-19 cases daily, ICU availability and the vaccination rate.

Shifting priorities

M40 families The Malaysian Insight spoke to said they have cut spending in some areas and shifted the amount saved to buying other items.

The most common areas of increased spending are groceries, due to the ban on dining in at restaurants, and household items to adapt to working from home.

Some also splurge on luxury items to compensate for not being able to go out and eat.

Iwin Tay, 28, who lives in a four-member household, said he has been spending more on groceries since the start of the pandemic. His electricity bills have also increased significantly.

“There used to be three of us living under one roof, now there are four, so now I have to spend more on groceries.

“My monthly electricity bill went up from RM380 to RM590. But this could be because my mother runs a small business from our home,” said the businessman.

He has spent less on petrol and toll as well as eating out, but doesn’t count this as savings.

“I don’t think I have been able to save more money during this time. The money for petrol and toll is now allocated for groceries, bills and household items.”

Susan Lai, 31, a copy editor at a tech company said she used to spend RM1,000 a month eating out before the pandemic. Now, she spends around RM500 a month on groceries for one person.

“Cooking at home does save a lot and (with no dine-in allowed) I don’t drink as much alcohol, which is expensive outside.

“I did spend money on buying a treadmill to replace not being able to go to the gym, a coffee machine to replace cafe visits and better vacuum and steam mop to clean my house,” she said.

For Liew Suet Li, 33, the pandemic and the birth of a baby changed the way she and her family spent their income.

“Previously, we spent around RM100 a month on groceries because we ate out most days. Now, it’s between RM150 to RM200 a week for groceries as I cook five days a week, and 70% of the stuff I buy now is organic. Milk and diapers alone cost RM400 a month,” said the mother of one.

Liew is not only spending on groceries, but also on items that make confined life at home easier and more comfortable while saving on petrol, toll and travel related expenses.

“I bought some luxury items such as a massager and Nintendo Switch to make staying at home more comfortable since we can’t go out.”

Another individual who wished to remain anonymous said she had spent most of her money on furniture, a new mattress, plants, groceries, home improvement projects and online shopping.

“I have saved more on petrol, parking, toll and dining out simply because I go out less.

“In the past year, I have definitely been able to save more money, which I have set aside for a future house. Money that I set aside monthly for any travelling (holidays) has also increased,” she said. – June 21, 2021.