KUALA LUMPUR, June 11 — Malaysians already have plans for the extra cash expected to be saved with the zero-rating of the Goods and Services Tax (GST), a Nielsen Malaysia survey shows.

This includes paying off debts and buying things they really need.

In its poll of over 1,000 Malaysians, the company found that two out of three consumers or 69 per cent expect to change their spending habits now that they no longer have to pay GST.

The survey found that close to one-third will be spending more now on essential items like clothing (30 per cent), non-perishable food (28 per cent), perishable food and baby products both at 27 per cent, while 23 per cent and 13 per cent said they will be spending more on main personal care items and household utility.

Even for items considered non-essential, Malaysians polled indicated they are now willing to pour more of their finances into holidays or leisure trips (33 per cent), buying a new property (27 per cent), out-of-home entertainment (26 per cent) and consumer electronics (23 per cent).

"One in four consumers (25 per cent) also said that they will be able to channel their money toward paying off debts once the GST is zero-rated,” Nielsen Malaysia said in a statement today.

Nielsen Malaysia’s managing director Raphael Pereda believes that local retailers are already tapping into the optimism shown by Malaysian consumers after the elections, also adding that the planned increase in consumer spending could likely result in more sales and benefit manufacturers and retailers.

"Many retailers have been providing consumers with discounts even before the zero-rated GST was officially implemented to encourage consumers not to postpone their festive spending to after June 1, 2018. If these value-for-money promotions continue, we can expect to see an increase in sales volume compared to previous years,” he said in the statement.

The June survey showed 82 per cent or most of the respondents polled believing that the economy will improve after the GST is zero-rated, while 12 per cent said it would remain unchanged and only six per cent said the economy would worsen.

In Nielsen’s similar survey in 2015, only 58 per cent felt the economy would improve after the GST is introduced, and  28 per cent said the economy would get worse and 14 per cent said the economy would remain the same.

The same survey this month showed 57 per cent of the consumers polled believing prices will drop with the GST at zero, while 33 per cent believe prices will remain unchanged and 11 per cent believe that prices will go up.

Aside from the move to not collect GST, the federal government under Pakatan Harapan (PH) has also recently decided to fix the retail prices of RON95 petrol and diesel with the aid of an allocated RM3 billion in subsidy for this year, keeping only the RON97 petrol on the weekly price system.

Nielsen’s survey results showed that 77 per cent or three out of four consumers polled believe that the fixed fuel price policy is good for consumers, while 16 per cent said it makes no difference to consumers and four per cent said it is bad for consumers and three per cent said they "don’t know.”

Pereda said it was clear that the government’s recent policy announcements have gained the approval of a vast majority of Malaysians.

"We are eager to see if this post-election optimism translates into actual consumer spending, which we will be able to determine over time through our retail data,” he said.

The June survey involved 1,000 consumers ranging between the ages of 18 to 64 and of different races and income groups throughout the country.