MIDF Amanah Investment Bank Bhd is holding firm on its forecast of a 4.6% growth in retail sales for 2025, moderating from a stronger 5.5% expansion in 2024. According to MIDF Research, the outlook remains cautiously optimistic, underpinned by a stable labour market, controlled inflation, and supportive fiscal and monetary policies.
The research house highlighted that government initiatives such as direct cash aid, flexible access to retirement funds, wage hikes for civil servants, and an increased minimum wage will continue to support household spending throughout the year.
“Despite the moderation, domestic consumption remains a key pillar of Malaysia’s economic growth,” MIDF Research noted in its latest report. The bank expects tourism recovery to further contribute to sustained retail momentum, particularly in key urban and tourist-centric areas.
Retail trade in Malaysia recorded a 5.9% year-on-year (y-o-y) growth in February 2025, easing from 8.2% in January, based on the latest data from the Department of Statistics Malaysia. However, the broader distributive trade sector showed stronger gains, rising 5.1% y-o-y in February compared to 4.5% in January, buoyed by a rebound in motor vehicle sales and continued strength in wholesale trade.
Wholesale trade grew 5.3% y-o-y in February, up from 4.8% in the preceding month — a positive signal for Malaysia’s broader retail ecosystem.
While MIDF remains confident in the domestic growth narrative, it cautioned that external risks such as intensifying global trade tensions could weigh on consumer sentiment and spending patterns.
“Geopolitical uncertainty continues to pose downside risks, but overall we expect Malaysian households to maintain consumption resilience, supported by ongoing policy measures and improving income prospects,” the research note stated.–BERNAMA
