RETAIL TRADE TO EXPAND BY 7.5% THIS YEAR - MIDF RESEARCH

Retail trade is expected to expand by 7.5% this year, with steady momentum of domestic demand likely to continue, MIDF Research said.

The momentum would be underpinned by a resilient labour market, positive real wage growth, stronger pick-up in tourism activities and supportive and accommodative economic policies, the research house said in a note.

"However, upward inflation pressure may affect consumer demand depending on the potential effects of targeted subsidy approaches and fluctuations in the global commodity prices,” it said. 

MIDF Research added that Malaysia's consumers were 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% of January 2019 levels, due to the persistent pick-up of ASEAN and Non-ASEAN passengers,” the research house said. 

It said Malaysia's consumers were still positive on big-t'icket items with strong fundamentals such as motor vehicles.

“Overall distributive trade sales were up 5.4%, thanks to double-digit expansion of motor vehicles sales. Post-pandemic saw motor vehicle's share surged to a new high of 12.3% 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 a sales value of RM142.4 billion, an increase of 5.4% year-on-year in January 2024, driven by the wholesale trade sub-sector, which rose 5.5% or RM3.3 billion to register RM63.7 billion.