Steady Domestic Sales Despite Inflation Concerns, Retail Trade Forecast Revised To 5%

Based on the latest readings released by the Department of Statistics, Malaysia’s consumer demand remained steady as overall domestic trade expanded by +6.6%yoy in Apr-24, the fastest pace since Sep-23. Among the upside factors were motor vehicle sales which jumped by +18.1%yoy, the highest rate in 6-month.

Sales of retail and wholesale trade rose by +5.5%yoy and +4.8%yoy respectively. In terms of seasonally adjusted volume, distributive trade expanded by +5.5%mom (2-year high) while motor vehicles and retail trade improved by +21.5%mom and +3.8%mom respectively. Stable job market and low inflationary pressure were fundamental reasons supporting
the resilient domestic demand.

Looking ahead, MIDF said it foresees consumer demand to stay on expansionary mode amid positive real wage growth, better pick-up in tourism activities and supportive & accommodative economic policies. However, there remain downside risks to the demand especially high inflation expectations and pessimistic consumer sentiment.

In view of this the house is downgrading retail trade forecast from +7.5% to +5.0% in 2024. As of 4MCY24, Malaysia’s
distributive trade sales increased by +5.7% (2023: +7.7%). The components include sales of motor vehicles and
retail trade improved by +10.2% (2023: +12.3%) and +5.2% (2023: +9.0%) while wholesale trade rose by
+4.9% (2023: +5.2%).

Moving forward, the house is of view the steady momentum of domestic demand is expected to continue in 2024 underpinned by resilient labour market, positive real wage growth, better pick-up in tourism activities and supportive & accommodative economic policies. However, we opine upward inflation pressure may affect consumer demand depending on the potential effects of targeted-subsidy approaches and fluctuations in the global commodity prices.

Previous articleS P Setia Concludes Johor Land Sale, Set To Gain RM332 Million
Next articleBermaz Auto Closes FY24 With Higher PAT Of RM351 Million

LEAVE A REPLY

Please enter your comment!
Please enter your name here