In its research note, the investment bank stated that it foresees a robust consumer demand to continue in H2 2024, supported by a stable job market, increased tourism activities, and supportive economic policies.

“Nonetheless, potential downside risks persist, notably elevated inflation expectations and subdued consumer sentiment,” it said.

In another report, the statistics department said Malaysia’s wholesale and retail trade grew 5.4% year-on-year (y-o-y) in June, registering sales of RM146 billion.

The rise was driven by the retail trade sub-sector, which rose 7.9% to record sales of RM64.1 billion.

MIDF Amanah also noted that growth in motor vehicle sales, however, moderated sharply to 2% y-o-y, while wholesale trade advanced further by 4% y-o-y.

“The softer growth in vehicle sales in June might be due to the implementation of diesel subsidy rationalisation which affected commercial vehicle sales.

“The sustained expansion in consumer demand aligned with the healthy labour market conditions and stable inflation, as price pressures, in general, remained under control despite the implementation of diesel subsidy rationalisation in June,” it added.

Meanwhile, MIDF Amanah maintained its retail trade forecast at 5% for 2024.

As of H1 2024, Malaysia’s distributive trade sales increased by 5.9% from 7.7% in 2023, while sales of motor vehicles and retail trade improved by 7.5% (2023: +12.3%) and 6.3% (2023: +9.0%), respectively.

Meanwhile, wholesale trade rose by 4.7% (2023: +5.2%).

“The steady momentum of domestic demand is expected to continue in 2024, underpinned by a resilient labour market, positive real wage growth, a better pick-up in tourism activities, and supportive economic policies.

“However, upward inflationary pressure may affect consumer demand, contingent on the potential effects of targeted fuel subsidy approaches and fluctuations in global commodity prices,” said MIDF Amanah.