After recorded double-digit expansion rate in 2022, Malaysia’s distributive trade posted growth of +7.7% in the following year. Sales of motor vehicles still on double digit rate of +12.3% while wholesale and retail trade rose by +5.2% and +9.0% respectively. In the final month of 2023, overall domestic trade rose steadily by +4.8%yoy which was supported by growth in all three components. However, distributive trade as well as retail trade and motor vehicle declined by -1.4%mom, -0.5%mom and -4.6%mom, respectively, in terms of seasonallyadjusted volume.
The resilience of Malaysia’s consumer demand is in tandem with the healthy job market and softening inflationary pressure. Latest unemployment rate hit a new post-pandemic low of 3.30% in Nov-23. Looking ahead, MIDF foresees a sanguine domestic outlook for 2024 amid better stable income growth, further pick-up in tourism activities and supportive & accommodative economic policies from both fiscal and monetary sides.
MIDF expects 2024 retail trade to expand 7.5%. All components particularly sales of motor vehicles and retail trade improved by +12.3% and +9.0% while wholesale trade inched up by +5.2%. Consumer demand remained firm and resilient as reflected in the distributive trade sales performance. Moving forward, the upbeat momentum of domestic demand is expected to continue in 2024 underpinned by resilient labour market, stable income growth, pick-up in tourism activities and supportive & accommodative economic policies. However, upward inflation pressure may affect consumer demand depending on the potential effects of targeted-subsidy approaches and fluctuations in the global commodity
prices.
