Despite inflationary pressure, Malaysia’s consumer spending remained resilient particularly shown by sales of motor vehicles and retail trade. The upbeat momentum of both sales in terms of yearly and monthly basis really proves that Malaysia’s consumer demand is still intact and robust. Apart from stable inflation and a steady job market, we foresee the revival of tourism activity is set to support Malaysia’s retail trade spending in 2023. In particular, the reopening of China and Japan would benefit tourism in ASEAN region including Malaysia.
With the upcoming retabling of Budget 2023, MIDF believes cash assistance, bonuses, and local spending incentives will boost further consumer confidence and demand this year
MIDF forecasts retail trade growth to average +8.9% for 2023. Considering the macroeconomic outlook and improving domestic fundamentals, the research house is optimistic that retail trade growth is able to touch 8.9% in 2023. The research house believes the pent-up demand will continue into this year underpinned by an improving labour market, stable inflationary pressure, accommodative economic policies, and an uptick in the tourism industry. Even though OPR is closer to normalised rate of 3.00%, MIDF believes it would have minimal effect on the domestic spending outlook.
