Ramazan sales fall at Malaysian stores

As the Muslim fasting month draws to a close, Malaysian retailers are lamenting the most dispiriting Ramazan sales in years, adding to evidence recent hard decisions on taxes and subsidies might be costing the economy its main growth engine, according to foreign sources.

The fasting month is traditionally the busiest time of the year for Malaysian retailers, but the country’s retailers association are predicting a plunge in Ramazan sales of as much as 20 percent compared with last year, it was reported.

“Shoppers are more cautious with their money,” said Indah Asbiran, who sells traditional Malay costumes for women at a stall in Tunku Abdul Rahman bazaar, the grande dame of festive shopping in Kuala Lumpur. “You see people walking by but not buying much.”

A recent survey by the Malaysian Institute of Economic Research showed consumer sentiment had dropped to the lowest for six years. Sentiment worsened after the government dismantled petrol subsidies in December and introduced a goods and services tax (GST) this year. With many households shouldering heavy debts, some shoppers are looking and not buying.

Private consumption accounts for over half of Malaysia’s gross domestic product. Its 8.8 percent expansion in the first quarter drove the economy’s growth of 5.6 percent, the fastest among Southeast Asia’s five biggest economies, sources added.