By Nurul Hanis Izmir
PUTRAJAYA, March 30 (Bernama) -- Economic uncertainty is shaping Malaysians' spending habits this festive season, with consumers adopting a cautious approach despite stable economic conditions.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the Malaysian economy continues to grow steadily at 5.1 per cent, with the labour market at full employment.
"This means many Malaysians are earning a steady income. The government has also introduced various policies, including raising the minimum wage to RM1,700 and increasing allocations for initiatives such as Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA)," he told Bernama.
Despite these measures, private spending remains below average. Bank Negara Malaysia (BNM) forecasts private spending growth at 5.6 per cent this year, up from 5.1 per cent in 2023 but still below the 7.1 per cent average recorded from 2011 to 2019.
"Even with this increase, consumers remain cautious, likely due to lingering uncertainty and the high cost of living," Mohd Afzanizam said.
He observed that many visitors to Ramadan bazaars browsed rather than made significant purchases, reflecting reduced transaction volumes compared to previous years.
Duit Raya Tradition Endures Despite Inflation
On the tradition of giving duit raya, Mohd Afzanizam highlighted that Malaysia's average annual inflation rate has been about 2.5 per cent since 1985.
"For context, RM1 in 1985 is now equivalent to around RM2.60 in today's value.
As a general guide, duit raya amounts can range from RM3 to RM5, with higher sums given to close relatives or subordinates, depending on one’s financial means.
"For me, duit raya is more than just a gift—it encourages children to complete their fasts during Ramadan and reinforces the spirit of Aidilfitri," he said.
He also noted a growing shift towards cashless transactions, with banks introducing digital duit raya platforms.
"However, for celebrations like Aidilfitri, some flexibility in using cash should be maintained to uphold tradition," he added.
BNM Promotes 'Fit' Banknotes for Sustainability
Bank Negara Malaysia (BNM) has limited the supply of new banknotes this festive season to promote sustainability in the financial system.
Instead, the central bank is distributing Fit banknotes—recycled notes that meet quality standards—ensuring they are clean, genuine, and suitable for circulation.
"New banknotes will only be issued if demand exceeds the supply of Fit banknotes," BNM stated on Instagram.
The Fit banknote screening process is akin to a health check, ensuring only well-maintained notes re-enter circulation. BNM estimates that using Fit banknotes saves energy equivalent to the annual electricity consumption of 2,393 households.
Second-Quarter Economic Growth Expected to Rise
Duit raya not only benefits individuals but also drives retail activity and domestic spending, Mohd Afzanizam said.
Historical data from 2017 to 2023 shows that Aidilfitri celebrations in the second quarter typically boost consumer spending, a key contributor to Malaysia’s gross domestic product (GDP) growth.
"In six of the past eight years, consumer spending accelerated in the second quarter, underscoring Aidilfitri’s role as both a religious celebration and an economic catalyst.
"Open houses—whether personal or corporate—fuel spending in catering, food supply, and event logistics. There is also a spillover effect on clothing, home furnishings, travel, and entertainment, further stimulating economic activity," he said.
Saving Duit Raya Wisely
For parents looking to save their children’s duit raya, Mohd Afzanizam recommends depositing it in recognised financial institutions such as Tabung Haji, Amanah Saham Bumiputera (ASB), or the National Education Savings Scheme (SSPN).
"The Employees Provident Fund (EPF) now allows accounts to be opened from the age of 14, giving parents the option to start saving for their children’s future," he said.
He also suggested gold as a stable long-term investment, especially for girls.
"Gold prices continue to rise, and amid global economic uncertainties, investing in gold is a secure way to preserve wealth," he added.
Rising Costs Reshape Duit Raya Giving
Private-sector employees Muhammad Ilyas bin Jamaludin and Noor Adillah binti Mohd Hamid, both 39, shared how they are adjusting their duit raya traditions in light of economic challenges.
"Our budget has been slightly reduced, so we now prioritise giving duit raya to relatives and close friends' children," they said.
While digital transactions are gaining popularity, the couple still prefers cash.
"QR payments are convenient, but they lack the festive charm. Plus, those selling duit raya envelopes have seen fewer customers as more people go cashless," they noted.
They emphasised the importance of teaching children to appreciate gifts, regardless of the amount.
-- BERNAMA
BERNAMA provides up-to-date authentic and comprehensive news and information which are disseminated via BERNAMA Wires; www.bernama.com; BERNAMA TV on Astro 502, unifi TV 631 and MYTV 121 channels and BERNAMA Radio on FM93.9 (Klang Valley), FM107.5 (Johor Bahru), FM107.9 (Kota Kinabalu) and FM100.9 (Kuching) frequencies.
Follow us on social media :
Facebook : @bernamaofficial, @bernamatv, @bernamaradio
Twitter : @bernama.com, @BernamaTV, @bernamaradio
Instagram : @bernamaofficial, @bernamatvofficial, @bernamaradioofficial
TikTok : @bernamaofficial
