Kenanga IB Maintains Malaysia's 2025 Distributive Trade Forecast At 6.5 Pct

KUALA LUMPUR, Feb 13 (Bernama) -- Kenanga Investment Bank Bhd (Kenanga IB) has maintained Malaysia’s distributive trade forecast at 6.5 per cent in 2025 from 5.5 per cent in 2024, driven by higher income prospects and tourism.

In a note today, the investment bank said the country’s distributive trade sales, involving wholesale and retail trades and vehicles, expanded to 5.7 per cent year-on-year (y-o-y), a five-month high, with full-year growth reaching 5.5 per cent in 2024 from 7.7 per cent in 2023, below its forecast of 6.0.

“We expect sales growth to expand in 2025 despite slower-than-expected performance in 2024.

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“Rising household income — driven by higher minimum wages and government salary hikes — should boost private consumption. Increased tourist arrivals and record-high government spending will further support sales growth,” it said. 

Kenanga IB also noted that the downside risk of the country’s distributive trade remains, particularly from the impact of subsidy rationalisation, which could impact consumer spending and behaviour in the second half of 2025 (2H 2025).

“However, the impact is likely limited as the government is expected to continue supporting vulnerable groups, although details remain sketchy,” it noted.

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Meanwhile, CIMB Securities Sdn Bhd projects Malaysia’s fourth quarter of 2024 (4Q 2024) gross domestic product (GDP) growth to come in at 5.0 per cent y-o-y compared to 5.3 per cent in 3Q 2024, bringing full-year 2024 GDP growth to 5.1 per cent.

“For 2025, a sustained external demand recovery fuelled by the global tech upcycle, alongside strong investments and resilient consumer spending, is anticipated to sustain GDP growth at 5.0 per cent, consistent with the government’s target 4.5 per cent to 5.5 per cent target.

“Nevertheless, downside risks remain elevated owing to uncertainties about a potential global trade war escalation, which may heighten global inflationary pressures, prompting central banks to adopt a more cautious approach to rate cuts, potentially dampening growth prospects,” it added.

-- BERNAMA