Malaysia's consumers are cautious.

Third quarter 2006 results are in from Malaysia's consumer sentiment survey conducted by the Malaysian Institute for Economic Research (MIER). Under the heading of "More Cheerful," the MIER summarized results in an undated posting on its website. The posting consists of a simple bar and line graph and a few brief comments.

The first comment is that the overall consumer sentiment index rose from 104.2 points in the second quarter 2006 to 107.5 in the third quarter 2006. The MIER said that consumer incomes were stable and this provided the basis for the rise.

Questions about jobs and consumers' perceptions of what might happen in the near term, however, were answered with expectations registering as "modest."

Apparently, Malaysian consumers were still wary of the state of the global oil market. A return to higher oil prices would be unsettling. "The rise in the cost of living, due to higher oil and electricity prices, will have a dampening effect on private consumption," said the MIER.

Interest rates also caused concern. Earlier in 2006 Bank Negara Malaysia (BNM), Malaysia's central bank, raised interest rates with fears of inflation on the horizon. About those rate hikes, the MIER said, "If inflationary pressures persist, Bank Negara could possibly raise the interest rate further, since it is still below the 'neutral' level."

The MIER sentiment survey also revealed, "laid-back spending plans in the pipeline." It is notable that while this may provide some concern for consumer spending in the first quarter 2007, economists often comment that survey attempts to coax predictions out of consumers result in the expression of feelings about present conditions rather than a realistic look at the future.