Monash University economics professor Dr Niaz Asadullah said the reopening of schools has impacted consumer spending on Hari Raya preparations due to competing financial demands. “Many families have to prioritise one expenditure over another, making difficult choices about where to allocate their limited funds. “This includes the needs of school-going children such as purchasing uniforms and books, as well as balik kampung expenses on top of essentials for Hari Raya.” Niaz said the cautious stance taken by many families can be traced to the aftermath of the Covid-19 pandemic, which caused significant shifts in household spending patterns. He said post-Covid-19, most households continue to be in financial distress with a considerable portion of family income still allocated for debt repayment, and servicing mortgages and vehicle loans. “The current financial difficulties have potential implications for the economy, especially small and medium-sized enterprises, and vendors who rely on B40 customers to spend during religious and cultural festivals. “But their cautious spending will translate to decreased sales, adversely affecting financial performance and long-term business sustainability.”
Niaz said in many Asian cultures, festive spending amounts to a sizable part of a household’s annual expenditure, which is also consistent with economic theory in normal circumstances. He said employees often receive bonuses, salary increments or gifts during festive periods, which means households will spend more. “Festive spending is driven by the need to preserve their social status in the community. This is also reinforced by peer influence that impacts consumer behaviour during festive seasons. “For example, any inability to give duit raya or host elaborate celebrations may cause social exclusion, which is why we see higher consumer spending regardless of an individual’s financial position,” he said.
Niaz added that the trend of cautious consumer spending even amid the fast-approaching Hari Raya celebration may also have macroeconomic factors contributing to it. He said while official data indicates otherwise, concerns about inflation persist among the public, with some B40 families viewing the purchase of new baju raya as no longer feasible or necessary, given the current economic conditions. “Additionally, the Central Database Hub has also caused uncertainty regarding the implementation of targeted subsidies that may lead households to not spend on non-essential items.” He said consumers may delay their purchases until after Hari Raya to take advantage of lower prices. “This is part of their cautious approach to spending during a period of economic uncertainty.”