Factors affecting consumer expenditure in Malaysia / Nur Azreen Kamarunzaman

Consumer spending or private consumption is one of the keys driven to Malaysia's economic growth because it accounts for the biggest share of domestic demand. However, with the rising of household debt, consumer spending is in a way of concern as the high household debt indicates that access to credit will be tighter than before. This means if the consumer spending too much until their debt increase, there is a possibility that the access to credit become limited. The purpose of the current study is to investigate the relationship between government income tax rate, consumer price index (CPI), and the interest rate on consumer expenditure. The data are collected from various sources, mainly from Thomson Reuters DataStream from the year 1986 until 2016 with annual data. Multiple regression method is used in this study. Based on the result of the test, it shows that level of government tax and consumer price index have a significant relationship with the consumer expenditure.