The pace of household spending in Malaysia

This article was prepared by BUNSEKI BAED to look at the pattern of household spending in Malaysia, especially for spending on eating out in addition to examining significant factors that can influence the tendency of Malaysians to eat out.

In addition, this article will also examine trends in the Consumer Price Index (CPI) and inflation for expenditure classes under the subgroup of food outside the home to see if price aspects influence household spending patterns for eating out.

Malaysia’s economic growth is driven by increased labor force participation, rising disposable income and stable consumption expenditure.

Consumption expenditure indirectly creates demand and further boosts the national economy.

There are many factors that can influence changes in the composition and spending patterns of households in Malaysia. Among them are the level of income, price of goods and taste.

Therefore, understanding consumer behavior is important in formulating and implementing effective strategies to achieve the goal of national economic growth and improve the well-being and standard of living of the community.

This consumer behavior can be understood and studied through a survey specially made by the Department of Statistics Malaysia (DOSM) through the Household Expenditure Survey (HES) which collects comprehensive data based on household spending and daily consumption patterns.

Consumption expenditure plays an important role in moving the economy in the country. High consumption expenditure reflects the strong purchasing power of households, further guaranteeing the stability of community development and economic growth.

The main concept of spending

There are three main concepts of expenditure that need to be understood in analyzing household expenditure, namely household consumption expenditure, household non-consumption expenditure and current expenditure.

Household consumption expenditure is private consumption expenditure for goods and services throughout the reference period.

This expenditure refers to the value of consumer goods and services obtained, used or paid by the household through direct purchase, own production, through the exchange of goods and services or income in the form of objects to meet the needs and wants of the household.

While non-consumption expenditure refers to payments for financial services and other payments to the government for the purpose of increasing national income. This means that the payment does not get a return or interest.

Examples of non-consumption expenditure are payments in the form of transfers such as income tax, social security contributions, compensation payments, compulsory payments and fines, grants to other households and repayment of loans such as housing, vehicles and investments.

The sum of both consumption expenditure and non-consumption expenditure will constitute the current expenditure of the household. Classification of Individual Consumption According to Purpose (COICOP) provides guidance on the classification of items of goods and services based on 13 expenditure groups.

Expense groups 1 to 12 refer to consumption expenses, while expense group 13 refers to non-consumption expenses (refer to Table 1).

COICOP Expenditure Group.

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Current household expenses

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Classification of consumption expenditure according to basic needs, options and combinations.

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