Malaysians Seen Curbing Spending as Living Costs Surge: Economy

Millions of middle-class Malaysians are grappling with the biggest increase in state controlled electricity and gasoline costs since 2008, threatening consumer spending growth and reasserting the country’s reliance on exports this year.

Since winning a May election, Prime Minister Najib Razak has unleashed a series of price increases to cut subsidies and improve state finances, crimping scope for companies to boost wages while spurring inflation. The moves, from a 14 percent jump in sugar costs in October to an 11 percent increase for gasoline in September and an average 15 percent to 16.9 percent climb for electricity this month, could slow private consumption growth by 0.9 percentage point in 2014, according to Alliance Financial Group Bhd. and Malaysian Rating Corp.