An Analysis of the Financial Impact of COVID-19 Pandemic on Malaysian Households

Abstract

Malaysia declared a movement control order in response to the COVID-19 outbreak on 18 March 2020. Since then, varying degrees of economic and movement controls have been imposed until 31 March 2022.  Many have experienced adverse financial impacts due to the unexpected and prolonged suspension of select economic activities. Using data from a survey collected online from 401 respondents in Malaysia, a logistic regression model was used to determine factors that can significantly affect the likelihood of experiencing financial difficulties during the COVID-19 pandemic. Apart from socio-demographic factors, an individual’s savings rate, loan commitment, and the extent of the financial cushion are found to significantly affect the likelihood of experiencing financial difficulties. This study also provides insights into Malaysians’ experience when managing their financial difficulties during the pandemic and the financial lessons they learned from it.