KUALA LUMPUR, Oct. 21 (Xinhua) -- Consumer spending in Malaysia will begin its recovery in 2022, with household spending forecast to grow by a real rate of 5.1 percent, Fitch Solutions Country Risk and Industry Research said on Thursday.
"We expect the consumer to recover from two years of contractions in spending levels. Spending will follow the wider economic recovery, as higher vaccination rates over the first half of 2022 allow for more localities to lift restrictions that have hampered retail sales," said the Fitch unit in a statement.
Its consumer spending forecast is also in line with its view that Malaysia's wider economy is forecast to grow by 5.5 percent over 2022.
"Malaysia's economic recovery from the COVID-19 pandemic will be slow, with the country being in a constant state of lockdown for nearly two years," it said.
According to the research house, total consumer spending fell to 855 billion ringgit (about 205.7 billion U.S. dollars) over 2021, 5.4 percent lower than the 905 billion ringgit (about 217.7 billion U.S. dollars) recorded in 2019, the pre-COVID-19 environment.
"As such, the Malaysian consumer recovery from COVID-19 will only begin in 2022. We note, however, that the recovery will be rapid enough to total 915 billion ringgit in 2022, building slightly on the figure recorded pre-pandemic," it said.
Fitch Solutions also highlighted several risks to outlook over 2022, especially in the first quarter of 2022, including elevated inflation, and the possibility of new COVID-19 variants, which could lead to the re-imposition of COVID-19 related restrictions.