KUALA LUMPUR (March 20): Retail Group Malaysia has revised downward its projection for 2017 retail growth in Malaysia to 3.9%, citing the rising cost of living and economic uncertainty.

"Right now, we are not too optimistic of 2017 performance. The economic environment is not [as] good as we expected, that's why we revised it downwards to 3.9% [from the previous 5%]," said its managing director Tan Hai Hsin at a press conference during the Hong Leong Investment Bank Bhd (HLIB) and Bursa Malaysia Bhd's fourth instalment of its Bursa-HLIB Stratum Focus Series.

Tan highlighted several factors that will affect the retail growth rate, which included the ringgit recovery, possibility of the 14th general election, rising cost of living and new US economic policies among others.

"This is because they generate economic and business activities during this period. When government and private spending increase, general public will have more money," Tan told theedgemarkets.com when asked about the effect of the election on the retail growth rate.

Although it has been almost two years since the introduction of goods and services tax (GST), Tan mentioned that the retail industry has yet to recover from GST.

Following the estimates of retail quarterly growth rates in the first and second quarters of 2017 of 1.5% and 2.5% respectively, Tan said he hopes the retail growth rate would recover to 5% and 5.5% respectively in the last two quarters of 2017.