Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on June 13, 2018

KUALA LUMPUR: Supported by a strong retail trade, Malaysia’s distributive trade rose 7.7% year-on-year to a three-month high of RM99.9 billion in April and is likely to improve in the second half of 2018, said MIDF Research.

“We opine that retail sales performance to expand at a steady pace in 2H18 amid moderating inflation and supportive policy changes for consumers, such as a zero-rated goods and services tax and stabilised retail fuel prices,” it said in an economic review.

“The tax holiday period coincides with Hari Raya, which [historically] records a seasonal surge in consumer spending.”

Additionally, a firm domestic spending coupled with a strengthening labour market would also support the domestic economy via private consumption and the services sector, the research house said. It noted domestic expenditure had benefited from strong external trade activities in April 2018, as exports expanded 14% y-o-y to a record high of RM84.2 billion for the month.

As a result of continued strength in distributive trade, MIDF Research estimates private consumption and the services sector to grow at 6.5% and 6.2% this year.

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