Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily on September 12, 2019

KUALA LUMPUR: The sales value of Malaysia’s wholesale and retail trade grew 5.7% year-on-year (y-o-y) in July to a record high of RM112.5 billion, a spurt economists believe will likely continue in the coming months sustained by a number of factors including stable employment.

Following the robust performance, UOB Malaysia economist Julia Goh reckons that the momentum could continue for the remainder of the year.

“This underscores the resilience in private consumption spending and continues to be the key driver for Malaysia’s domestic economy. It will be driven by a stable labour market and sustained wage growth, as well as government assistance,” Goh told The Edge Financial Daily.

Similarly, MIDF Research expects the encouraging trend of distributive sales registered in 2018 to continue this year, supported by economic conditions such as low inflationary pressure and upbeat tourism activities, besides a stable job market.

“For the second quarter of 2019 (2Q19), distributive sales expanded at a slightly moderating pace of 6.1% y-o-y compared with 6.6% y-o-y in 1Q19.

“For 3Q19, we foresee a continuous positive performance in distributive sales underpinned by low inflation, stable job market and supportive monetary and fiscal policy changes such as the overnight policy rate cut and stable retail fuel prices.

“In addition, average passenger movement growth of 8.2% y-o-y in the first two months of 3Q19 (2Q19: 5.2% y-o-y) are likely to be translated into steady growth for retail sales in this quarter,” it added.

The research house maintains its forecast expansion for private consumption and services sector at 7.5% and 6.5%, respectively, for 2019, although it pointed out the high base effect from last year’s tax holiday period could influence estimates.

In a statement yesterday, the Statistics Department’s chief statistician Datuk Seri Dr Mohd Uzir Mahidin attributed the 5.7% increase in the nation’s wholesale and retail trade to retail trade, which expanded 7.1%, driven by the 10.5% growth in retail sales of food, beverages and tobacco.

“This was followed by retail sales of other goods in specialised stores and retail sales in non-specialised stores which registered 8.2% and 8.1% respectively. For wholesale trade, sales value expanded 6.6%. On the other hand, motor vehicles registered a negative growth of 1.7% as against a year ago,” Mohd Uzir said.

Compared to the preceding month, the country’s wholesale and retail trade sales value rose 0.2% in July from June as retail trade grew 1.1% while wholesale transactions contracted 2.3%, according to the department.

“Motor vehicles sub-sector grew 7.3% after a contraction of 5.4% in June 2019,” Mohd Uzir added.

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