KUALA LUMPUR, Nov. 12 (Xinhua) -- Malaysia's consumer demand is set to strengthen, supported by steady domestic fundamentals, policy stimulus and cash aid measures, analysts said on Wednesday.
BIMB Securities said in a note that Malaysia's consumer demand is gearing up for a stronger recovery, underpinned by firm domestic fundamentals and pro-growth policy measures.
According to the research house, a lower overnight policy rate (OPR), the universal 100 ringgit cash aid, and clarity on the RON95 fuel subsidy mechanism will lift the country's household spending in the second half.
For BIMB, the sales and service tax (SST) hike, the new electricity tariff, and the water-tariff adjustment are expected to have only mild effects, keeping consumption resilient amid subdued inflation.
It is noted that as of the first nine months of 2025, Malaysia's distributive trade sales grew 4.9 percent year-on-year, with retail and wholesale trade expanding by 5.7 percent and 5.3 percent, respectively, while motor vehicles returned to a marginal increase of 0.6 percent.
Kenanga Research also expects the distributive trade momentum to gradually pick up in the second half, supported by rising tourist arrivals, firm domestic demand, higher government spending, favorable policy rate, and a higher minimum wage.
"We reiterate our 2025 gross domestic product growth forecast at 4.3 percent. Growth will be driven by a resilient services sector, a mining recovery, and front-loaded activity which likely boost the export-oriented manufacturing sector," said the research house.
Meanwhile, MBSB said in a note that the retail-sales growth is expected to moderate to 4.6 percent in 2025, from 5.5 percent in 2024, supported by a resilient labor market, low inflation, rising wages, and a robust tourism recovery, all boosting household disposable income and sustaining private consumption.
Overall, it opined that domestic consumption is likely to remain the key growth driver, cushioning the economy against external trade uncertainties, though downside risks persist from possible U.S. tariffs on semiconductors and potentially weaker external demand. ■
