MIDF Research said Malaysia’s retail spending for July 2022 remained on an upward trajectory, with distributive trade sales growing 41.0% year-on-year in July 2022. – Image by Devan Manuel
Monday, September 12, 2022 3:54 PM MYT
KUALA LUMPUR, September 12 – Retail trade in Malaysia is expected to grow by 17.6% this year, supported by improving macroeconomic outlook and fundamentals, MIDF Amanah Investment Bank Bhd Research (MIDF Research) said.
In a note released today, he said Malaysia’s consumer spending was growing strongly, as evidenced by retail sales growth of 21.6% year-on-year (year-on-year) over the past seven first months of 2022.
“We expect pent-up demand to continue through the end of this year, supported by improving labor markets, stable inflationary pressure and the reopening of the domestic economy,” he said.
Citing data released by the Department of Statistics Malaysia (DoSM) earlier today, MIDF Research said Malaysia’s retail spending for July 2022 remained on an upward trajectory as distributive trade sales increased by 41.0% YoY in July 2022.
He said retail spending rose sharply by 37.5% year-on-year, while wholesale trade rose 20.6% year-on-year and motor vehicle sales jumped 613.8% year-on-year.
“The high growth rates were widely expected due to weak base effects as Malaysia faced another strict nationwide lockdown in July 2021,” he said.
Meanwhile, the research house noted that although the central bank raised the overnight rate (OPR) by 25 basis points to 2.5% last week, it believed the interest rate higher benchmark would have minimal effect on domestic spending.
“The OPR should reach 2.75% by the end of this year; still below the 2019 level of 3.00%.
“We believe Malaysia’s monetary policy is on a normalizing rather than a tightening path, and could eventually reach 3.00% by early 2023,” he said. — Bernama