RETAIL TRADE TO GROW BY 7.5% IN 2024 ON RESILIENT CONSUMER DEMAND - MIDF

RETAIL TRADE TO GROW BY 7.5% IN 2024 ON RESILIENT CONSUMER DEMAND - MIDF

MIDF Research expects Malaysia's retail trade to expand by 7.5% in 2024 on the back of resilient consumer demand amid a healthy labour market and softening inflation pressure.

The research house said that in the first 11 months of 2023, Malaysia's distributive trade sales increased by 7.9% year-on-year (y-o-y), with retail trade rising 9.4%.

Other components of distributive trade also improved, including sales of motor vehicles (up 13.0% y-o-y) and wholesale trade (up 5.3% y-o-y).

Consumer demand remained firm and resilient as reflected in the distributive trade sales performance, it said.

"Moving forward, the upbeat momentum of domestic demand is expected to continue in 2024 underpinned by a resilient labour market, stable inflationary pressure, pick-up in tourism activities, and supportive and accommodative economic policies,” MIDF Research said in a note.

In November 2023, Malaysia's distributive trade posted a growth of 6.2% y-o-y, the slowest expansion rate since July 2023.

On a month-on-month basis, non-seasonally-adjusted distributive trade inched up 0.2%. 

By component, sales of motor vehicles continued its strong momentum with a 12.7% y-o-y growth, while wholesale trade rose by 6.2% and retail sales swelled by 4.4%. 

In terms of seasonally-adjusted volume, distributive trade, retail trade and motor vehicles increased by 4.7%, 1.0% and 10.6% y-o-y, respectively.

Meanwhile, the unemployment rate hit a new post-pandemic low of 3.30% in November 2023.

"Looking ahead, we foresee a sanguine domestic outlook for the fourth quarter of this year and 2024 amid better pick-up in tourism activities and supportive and accommodative economic policies from both fiscal and monetary sides,” MIDF Research said.