By RACHAEL KAM(The Star)
PETALING JAYA: Malaysia’s consumer confidence index has dropped further to 27.8 for the first half of 2009 from 35.9 six months earlier and 36.9 a year ago, the latest MasterCard Worldwide Index of Consumer Confidence survey showed.
The outlook was the second lowest score since the inception of the survey in 1993.
“The lowest score was registered during the height of the 1997-98 financial crisis, when the outlook for the second half of 1998 stood at 23.8,” MasterCard said in a statement yesterday.
Consumer confidence across all five indicators in Malaysia fell even further from six months ago, with the sentiment on employment at 22.6 from 38.1 before.
Dr Yeah Kim LengThe 17th year MasterCard Worldwide Index of Consumer Confidence is the region’s most comprehensive and longest running consumer confidence survey released twice a year.
The Index is based on a survey that measures consumer confidence on prevailing expectations in the market for the next six months. It is calculated with zero as the most pessimistic, 100 as most optimistic and 50 as neutral. However, economists contacted by StarBiz projected slight improvement in consumer confidence and sentiment in the second half year when global demand was expected to stabilise.
RAM Holdings Bhd chief economist Dr Yeah Kim Leng said the other key factors underpinning a return in consumer sentiment included the positive wealth effects of the stock market run-up, low interest rate and liquidity-flushed environment.
Effects of the first and second fiscal stimulus packages and, lower-than-expected number of job losses and distressed companies in the first half of this year were other reasons, he said.
“We also see higher commodity prices, which tend to prop up rural consumer spending, to boost consumer and business expenditure in the second half,” he told StarBiz.
Meanwhile, Kenanga Investment Bank Bhd economist Wan Suhaimi Saidi said consumer confidence and sentiments would strengthen in the fourth quarter following positive news on the improvement in retail sales in United States and China.
He said the improvement of retail sales indicated possible early recovery of the global economy.
“We anticipate the economy might start recovering in six to 12 months, then companies will start recruiting and people will have more money to spend when they have a stable job,” he said.
In the Asia-Pacific, MasterCard said the overall consumer confidence outlook was down to 38.7 in the first half from 47.4 six months earlier and 56 a year ago.
The pessimism could be attributed to the continuing global credit crisis, volatility in financial markets and slower economic growth in many of the markets surveyed.
The survey conducted from March 23 to April 18 involved 9,211 consumers from 21 markets.
India was among the few markets with improved consumer confidence score to 68 from 63.9 earlier.
Other markets that remained optimistic about the first half year included Qatar (71.4), South Africa (67.3), Saudi Arabia (67.1), Lebanon (64.4) and Vietnam (60.9).
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