‘Encouraging distributive trade trend to continue’

KUALA LUMPUR: Private consumption and services sectors in Malaysia are expected to grow at 7.5 per cent and 6.2 per cent respectively this year, said MIDF Research.

The firm said an encouraging trend of distributive sales last year was expected to continue this year, supported by positive economic conditions, such as more job creation, wage growth and upbeat tourism activities.

“Distributive trade grew by eight per cent year-on-year (yoy) in December last year as retail sales sustained their double-digit growth for the seven consecutive months,” said MIDF Research yesterday.

“Wholesale trade increased by 6.7 per cent yoy while motor vehicles fell by a negative 1.4 per cent yoy in the final month of 2018,” it added.

MIDF Research said the strong momentum in distributive trade would translate to solid growth for private consumption and services sector.

“This will drive Malaysia’s economy into a good position this year. Moreover, clearer direction of the economy and supportive policies such as targeted petrol subsidy with RON95, to be capped at RM2.2 per litre, will pave the path for domestic consumption to rise steadily throughout the year,” it added.

On yearly basis, distributive trade expanded by 8.2 per cent, motor vehicles by 3.3 per cent, the highest in three years, wholesale by 7.3 per cent and retail by 11 per cent last year.

“We expect view continuous solid domestic demand this year, underpinned by a stable job market, wage growth, moderate inflationary pressure and steady economic growth,” it said.