It said the projected improvement follows the 0.5% growth estimated for 2021, when impacts from Covid-19 continued to weigh on domestic demand.

In a statement today, the research house said the recovery in consumer spending will come as the wider economy recovers, with growth mainly driven by private consumption and fixed investments.

“At RM768.1 billion over 2022, real household spending will be 1.8% higher than the RM754.6 billion posted in 2019, pre-Covid-19,” it said.

Fitch Solutions said its consumer spending forecast is in line with its Country Risk team’s view that the wider economy is expected to grow by 5.5% over 2022.

It noted that Malaysia’s unemployment rate will begin to soften over 2022, dropping to an average of 3.9% of the labour force from 4.7% in 2021.