Private consumption and services sector to advance in 2021

KUALA LUMPUR: Distributive trade performance in the first quarter of 2021 (1Q21) to be disrupted by the Movement Control Order (MCO) 2.0, analysts observe but note that private consumption and services sector is to advance in 2021.

The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) highlighted in the latest economic review on the distributive trade for February 2021 that for distributive trade performance in 1Q21, it is anticipated to be disrupted by the MCO 2.0 which limit consumers’ outside activities and businesses’ operations hence reduce demand.

“It will also slow down domestic tourism activities to some extent while interstate travel are not allowed and international borders remain closed,” MIDF Research said.

In addition, the research arm foresees a temporary setback to the labour market recovery as some businesses may hold hiring due to the lower business activities during the MCO 2.0 period which will affect income prospects.

“This was supported by the consumer sentiment index by MI ER for 4Q20 which were down by 6.3 points to 85.2, the lowest reading in three quarters, pointed to deteriorating consumer confidence and a cut into their purchasing power amid challenging labor market conditions which probably rein their spending in upcoming months.”