KUALA LUMPUR, March 13 — Retail trade is expected to expand by 7.5 per cent this year, with steady momentum of domestic demand likely to continue, said MIDF Research.
The momentum will be underpinned by a resilient labour market, positive real wage growth, stronger pick-up in tourism activities, and supportive and accommodative economic policies, it said in a note today.
“However, upward inflation pressure may affect consumer demand depending on the potential effects of targeted subsidy approaches and fluctuations in the global commodity prices,” MIDF Research said.
It added that Malaysia’s consumers are still pessimistic amid the potential increase in inflation pressure.
Foreign tourist arrivals are expected to improve further this year, especially with the announcement of 30-day visa-free conditions for Chinese and Indian citizens.
“In January 2024, overall foreign passenger movements were recorded at 86.0 per cent of January 2019 levels due to the persistent pick-up of Asean and non-Asean passengers,” MIDF Research said.
Malaysia’s consumers are still positive on big-ticket items with strong fundamentals, including motor vehicles.
“Overall distributive trade sales were up 5.4 per cent, thanks to double-digit expansion of motor vehicles sales. Post-pandemic saw motor vehicle’s share surged to a new high of 12.3 per cent in 2023.
“We are of the opinion that the improving structure of the labour market was among the contributing factors towards the higher purchase of motor vehicles,” it said.
According to the Department of Statistics Malaysia, Malaysia’s wholesale and retail trade recorded RM142.4 billion in sales value, a 5.4 per cent increase year-on-year in January 2024, driven by the wholesale trade sub-sector, which rose 5.5 per cent or RM3.3 billion to register RM63.7 billion.
— Bernama
