Higher food prices due to the weakening ringgit and the global increase in food prices are expected to cause Malaysians to spend 9% more this year on Lunar New Year festivities, according to the annual United Overseas Bank Malaysia Bhd’s (UOB Malaysia) Lunar New Year Survey.

“On top of the higher price of staples such as sugar, vegetable oils and dairy products due to the increase in global food prices and the weaker ringgit, we are expecting a seasonal increase of up to 50% on some food items because of the Lunar New Year,” UOB Malaysia economist Julia Goh said.

The UOB Malaysia survey, conducted by global market and research specialist Ipsos, interviewed 500 people in Malaysia aged between 18 and 55 on the behaviours and attitudes for the 2017 Lunar New Year from November to December 2016.

Of the average Lunar New Year budget of RM4,201, a 9% increase from RM3,846 in 2016, respondents said they would allocate RM1,008 for food, a 14% increase from last year despite the higher cost of food this year with 43% of that amount going towards celebrating a traditional reunion dinner with loved ones.

Travelling was also an important focus for the Lunar New Year as respondents travelling overseas said they expected to spend an average of RM2,334, a 7% increase from last year while those visiting family and friends within Malaysia expected to spend RM1,263, up 66% from 2016.

Goh said the larger food and travel budgets were due to consumers not compromising on Lunar New Year traditions despite higher costs.

“However, feasting on food and travelling to visit friends and family are central to the way Malaysians bond with one another, especially during festive occasions such as the Lunar New Year. It is therefore not surprising that Malaysians continue to place a priority on such celebrations despite the economic environment,” Goh said.

As respondents prepared to spend more this Lunar New Year, 73% of those receiving red packets said they intended to save the money, while 25% said they would invest it.

More than 90% of respondents receiving red packets on behalf of their children would deposit the money into their child’s savings account.