KUALA LUMPUR: Kenanga Investment Bank Bhd (Kenanga IB) has maintained its 2024 distributive trade sales growth forecast of 8 per cent for Malaysia on expected robust domestic demand.
The term distributive trade refers to wholesale trade and retail trade.
The research house said this is supported by a projected decline in the unemployment rate to an average of 3.2 per cent this year from 3.4 per cent in 2023, alongside a rise in tourist arrivals and spending.
“We remain cautious in our outlook due to the uncertainty in the mechanism of subsidy rationalisation, which could potentially weigh on consumer spending and subsequently affect overall sales growth,” it said in a note.
It said Malaysia’s distributive sales increased to a three-month high in February 2024 at 5.5 per cent year-on-year (y-o-y) on higher sales of retail trade, which partially mitigated the sharp slowdown in motor vehicle sales. “Month-on-month growth contracted to 0.9 per cent from 1.1 per cent in January for the second straight month, albeit at a smaller rate, while sales value fell slightly to RM141.1 billion from RM142.4 billion in January 2024,” it noted.
Kenanga IB also maintained its 2024 gross domestic product (GDP) growth forecast of 4.5-5.0 per cent from last year’s 3.7 per cent growth following a rebound in the manufacturing sector, particularly the export-oriented sub-sector.
“We continue to project an expansion in the first quarter (1Q 2024) GDP growth at 3.3 per cent (4Q 2023: 3.0 per cent) given the sustained domestic demand, backed by recovery in the manufacturing sector,” it added. – BERNAMA
