KUALA LUMPUR, Feb 8 — MIDF Amanah Investment Bank forecast retail trade to expand by 5.5 per cent in 2022 supported by relaxations of containment measures, economic reopening and progressive improvements in macroeconomic data.
The investment bank said improvements in macroeconomic data are staging for strong consumer spending in the fourth quarter of 2021 (Q4 2021) as well as for 2022.
“We forecast private consumption to expand by six per cent for 2022. With interstate travels allowed, we project services sector to benefit and increase by 7.1 per cent for 2022,” it said in a research note today.
The investment bank said it also expected private consumption and services sector to contribute positively towards Q4 2021 gross domestic product growth.
It said the three-month moving average of distributive trade sales for Q4 2021 grew 5.1 per cent year-on-year (Y-o-Y) versus a decline of 9.1 per cent Y-o-Y versus Q3 2021.
“The consumer spending is set to stay on upward trajectory for 2022 underpin by significantly high vaccination rate, improving labour market, fiscal incentives and stable inflationary pressure,” it said.
It said the market is adapting with new normalcy and retail spending patterns to shift slightly from pre-pandemic years, especially on information, communication and technology and household items, among others, thanks to remote working and learning arrangements.
Meanwhile, the investment bank said consumer spending remained on an expansionary path with Malaysia’s distributive trade sales growth moderated at 3.5 per cent Y-o-Y in December 2021.
“All three components continue recording positive growth led by motor vehicles (1.5 per cent Y-o-Y), wholesale (4.1 per cent Y-o-Y) and retail (3.5 per cent Y-o-Y),” it said.
It said all components improved on sequential month basis despite the moderating trends.
It added that the expansion of distributive trade sales among was fuelled by, among others, modest recovery in the labour market and reopening of domestic economic activities. — Bernama
