"...the purchasing power of young working Malaysians is currently stagnant and is predicted to decline in coming years. This translates into lower spending power, less savings and less investments by young executives. "

Dedicated to increasing financial literacy in Malaysia, CompareHero.my has released a research report titled Nasi Lemak Index: Estimate Your Real Purchasing Power which indicates that the purchasing power of young working Malaysians is currently stagnant and is predicted to decline in coming years. 

This translates into lower spending power, less savings and less investments by young executives. Titled Nasi Lemak Index for its local relevance, the report compiles several economic indicators and salary indexes to formulate three simple equations (please refer to Appendix 1) and determines the Gross Disposable Income, Net Disposable Income, and Nasi Lemak Index, based on a few assumptions. 

“Our objective is simple: we want to help Malaysians save money and time via our comparison site, but we also aim to become the most trusted and credible source of unbiased information. With the Nasi Lemak Index, we hope to help young working Malaysians easily assess their long-term financial stability whilst considering economic factors like salary indexes, inflation rates, debt service ratio, and income-to-savings ratio. We hope this will help them budget their finances and know how best to utilise their monthly income”, said Benny Chee, Managing Director of CompareHero.my. 

Benny also believes that this index highlights the critical need for financial literacy across all age groups to ensure that by the time students enter the workforce, they understand how and where to save, spend, and invest their money for a more secured financial future. Also with the debt service ratio at 146%, this means that every Malaysian has to pay almost 1.5 times their monthly income to pay-off debts. 

If this ratio continues to rise, spending power will only further worsen; resulting in a need for young executives to review their monthly spend and ensure they aren’t getting themselves into further debt. The Nasi Lemak Index pins its findings on statistics and research from credible sources including JobStreet.com, Bank Negara, Private Pension Administration (PPA) Malaysia, Nikkei Asian Review and Aon Hweitt. 

“With adequate research to support its findings, the Nasi Lemak Index is a useful resource for the average Malaysian to assess their financial stability. When the debt service ratio breaches more than 100%, it means you are using your future income (money that you have not yet earned) to pay your debts and that is a dangerous cycle to be in. I recommend fresh graduates and young executives to read this report as it provides a good foundation in understanding your purchasing power,” added Desmond Chong, Financial Education Programme Trainer, RFP, CFP and Shariah RFP. 

You can read a summary of the report on the CompareHero.my website. All third-party use of the research report and its findings must be credited to CompareHero.my.