KUALA LUMPUR, July 29 -- High household debt levels remain a significant constraint on Malaysia's consumer spending despite an otherwise positive economic outlook, according to a new BMI report.

According to the Fitch Solutions firm, household debt reached 69.5 per cent of GDP in the fourth quarter of 2024, up slightly from 69.3 per cent in the previous quarter, based on Bank Negara Malaysia data.

"A high level of household debt remains a risk to our consumer outlook, as it not only

constrains future borrowing capacity but impacts current disposable income levels," BMI said in the report.

High debt servicing costs are eating into household spending power even as the central bank begins to ease monetary policy, BMI analysts warned.

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