Malaysia has outperformed Singapore and other regional trading partners in terms of business confidence in the third quarter of the year.
According to Global Economic Conditions Survey, The performance was in tandem with the improved confidence in China.
The survey is jointly carried out by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants.
Head of ACCA Malaysia David Chin said that concerns over rising household debt was predominantly observed in Malaysia, Singapore, South Korea and Thailand, preying on overall prospects within the region.
Chin said the affordable housing incentives and enhanced tax incentives announced in the recent 2017 Budget will have significant implications, said via a statement.
He added that a positive nudge towards addressing this household debt strain
On the global front, Chin said the survey showed that business confidence was at a 12-month high in the same quarter, boosted by increased prospects of government spending and recovery in China and North America.
“Despite the improvements in confidence, the world has yet to see it translate into a meaningful boost to hiring and investment,” pointed out Chin.
He quoted the survey as indicating only 19% of companies considered hiring new staff, while 14% were looking at opportunities to invest in new technology.
“In every region, there are more businesses planning to cut staff rather than hire more,” Chin said.
Malaysia could learn from the Organisation for Economic Cooperation and Development (OECD) to improve the investment driving confidence, he suggested
“Across the OECD, there is a strong correlation between governments reaching for their wallets, following years of austerity and improving confidence.
“This underlines the importance of investment to support economic growth,” Chin said.