KUALA LUMPUR, April 28 — Malaysian consumer spending is projected to remain strong throughout 2025 notwithstanding increasing debt pressure and global uncertainty, BMI said in a new report today.
In its BMI Country Risk & Industry Research, the Fitch Solutions unit said the optimistic forecast is supported by strong fundamentals in the country.
"This stable growth outlook is underpinned by a low inflationary environment and a stable labour market," BMI stated in its key view.
Overall household spending is projected to grow by 5.2 per cent year-on-year in real terms, reaching RM943.7 billion.
This growth signifies a return to pre-Covid spending levels, matching the average real growth rate seen from 2015-2019.
The country's healthy macroeconomic outlook is expected to drive real terms growth in household incomes.
Inflation, while ticking up slightly to a forecast average of 2.4 per cent, remains low enough to support purchasing power.
The unemployment rate in Malaysia remained stable at a multi-year low of 3.1 per cent in February 2025, underpinning consumer confidence.
BMI forecasts unemployment to average 3.1 per cent across 2025, supported by foreign investment and tourism.
Real purchasing power is also improving, with the average household expected to be 8 per cent better off in 2025 compared to 2019.
Easing inflation and a tight labour market are translating wage growth into better disposable incomes.
A strengthening Malaysian ringgit, forecast at RM4.5/USD in 2025, will further benefit consumers through cheaper imports.
The recovering tourism sector provides an additional boost to consumer spending, particularly in retail.
Latest retail sales data illustrate a steady picture, with February 2025 sales close to the 2024 monthly average.
BMI said it envisages a steady uptick in spending continuing over the forecast period to 2029.
