Private consumption, services sector to grow in 2019
KUCHING: Malaysia’s private consumption and services sector are expected to grow at 7.5 and 6.2 per cent, respectively, for 2019, analysts observed.
MIDF Amanah Investment Bank Bhd’s research team ( MIDF Research) in a recent report , commented: “We estimate private consumption and services sector to grow at 7.5 and 6.2 per cent respectively for 2019.
“Encouraging trend of distributive sales in 2018 is expected to continue for 2019 supported by economic conditions such as strengthening labour market including more job creation and wage growth on top of upbeat tourism activities.
“The strong momentum in distributive trade will translate into solid growth for private consumption and services sector thus will drive Malaysia’s economy into a good position in 2019.
“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 noted that distributive trade grew further by 8.6 per cent yo-y in November 2018 ( 8.2 per cent y- o-y in October 2018) to
We estimate private consumption and services sector to grow at 7.5 and 6.2 per cent respectively for 2019. MIDF Research
RM106.2 billion.
It said, retail sales sustained its double digit growth for the sixth consecutive months at 12.6 per cent y- o-y to RM42.9 billion in November 2018, the highest growth in three months after the reintroduction of SST.
Wholesale trade and motor vehicles increased by 6.9 per cent y- o-y and 2.1 per cent y- o-y respectively.
“Oil price is currently on the path of recovery and should maintain within the range of US$ 50 to US$ 60 per barrel, with oil producers reaching a pact to reduce production,” he said.
On the downside, he said the firmer ringgit would pose a problem for Malaysian exporters as their US dollar- denominated revenue would be lower in ringgit terms.
“Additionally, glove manufacturers are negatively affected as their locally produced goods are more expensive in the world market,” Ooi said.
On January 9, shares of glove manufacturers such as Top Glove Corporation Bhd, Hartalega Holdings Bhd, Kossan Rubber Industries Bhd and Supermax Corp Bhd declined significantly due to the firmer ringgit and higher crude oil prices.
“To manage the situation, these companies need to hedge their foreign currency exposure,” Ooi added. — Bernama