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Economics

NST Leader: Adapting to price hikes

The macroeconomic figures that Bank Negara Malaysia recently highlighted point to a steadily recovering economy, but it is the microeconomics that people get worked up on. – NSTP file pic

The three key barometers to empirically measure the Malaysian economy — growth, employment and price stability — are cruising with reasonably good news.

Growth is at 5.6 per cent for Q1 2023 and four per cent in June, making it an outstanding performer in the region. Unemployment dropped by 7.8 per cent to 3.73 per cent and employment climbed by 2.3 per cent to 16.31 million jobs.

Inflation for July 2023 eased to two per cent, a welcomed downturn since September last year, and the lowest rate this year, meaning a trend towards stable, affordable prices. .

The numbers, some of which were discussed earlier by Economy Minister Rafizi Ramli, are a nice gift for Malaysia to commemorate Merdeka Day although public perception feels rent, food, utilities and transportation are hovering on the higher side.

Depending on where and how you live, and the degree of complaints that inflation is creeping up, Malaysians still go out to dine, take vacations and staycations (the highways accessing Kuala Lumpur were clogged with out-of-state vehicles during these school holidays), and order meals and merchandise online by the boxes.

Therefore, any quibbling about inflation is relative.

The macroeconomic figures that Bank Negara Malaysia recently highlighted point to a steadily recovering economy, but it is the microeconomics that people get worked up on. A typical leafy Kuala Lumpur suburb reflective of a middle-to-high-class existence that hosts a significant business centre is in a state of paradox.

Business units are both burgeoning and closing down, thanks to hefty reassessments in rentals and long-term leases. Prompted by ownership transfers from corporate to private titles, traditional tenants, rocked by the staggering monthly rental spiking from four to five figures, have been forced to vacate but in their place are new, deep-funded and sophisticated corporate tenants.

In the striking turnover, gourmet and high-end cuisine joints replaced mom-and-pop eateries and pharmacies mushroomed, sometimes four to five within shouting distance of each other, at the expense of medical clinics. Then unexpectedly, the emergence of specialist shops — a chiropractor centre, for instance. Health certainly is wealth. But the endearing and enduring mamak restaurants seemed indefatigable, possessing an uncanny ability to survive the rental onslaught.

For the privilege of their presence, regulars have been stiffed: favourite nasi kandar, roti canai and teh tarik have quadrupled in price.

Still, the faithful seemed unfazed, and the crowd was still thronging as a show of economic strength and personal deep pockets.

In the heart of the Golden Triangle, a five-star international hotel exorbitantly prices its overrated cuisine (Hainanese chicken rice routinely priced on the street at RM6 to RM10 goes for an insane RM70++) but Malaysian patrons of all persuasions are still making reservations.

In that sense, Malaysia is still entrenched in an economic sweet spot: prices may inch up but not shoot up, while we adapt and keep up.

Source: NST Leader: Adapting to price hikes-New Straits Times

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