KUALA LUMPUR (Oct 21): The Government's 1Malaysia People's Aid programme had increased private consumption by an average of 7.1% between 2012 and 2015 as lower-income households' higher disposable income allowed them to consume more. According to the Finance Ministry's 2016/2017 Economic Report, household disposable income is the "main determinant" of private consumption, accounting for an average of 67.4% of private consumption growth. "The increase in earnings of the lower-income households will likely contribute to the growth in private consumption as they have a higher marginal propensity to consume," the ministry said. The Finance Ministry said this was higher than the 18 sen for households with monthly income of more than RM10,000. The immediate impact of BR1M is reflected by an increase in household disposable income of the B40, which in turn translates into higher purchase of essential items such as food and housing.

Source: The Edge Markets October 21, 2016 08:15 UTC