Given the progressive reopening of the economy and the expected recovery in the job market, analysts believe that a rebound in the momentum of consumer expenditure will boost the growth of retail sales further in the near term. — Bernama photo
KUCHING: Malaysia’s household consumption and service sectors are expected to recover later this year, analysts project in a July 2021 Distributive Trade report.
With the relaxation of restrictions for the fully-vaccinated individuals and the transition of states into the next phases of the National Recovery Plan (NRP), the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) anticipates domestic spending to rebound in the upcoming months and going into the final quarter of the year as more economic sectors can resume operations.
“Moreover, we foresee a positive job and income outlook as businesses are allowed to reopen and the growing demand will contribute to better hirings,” MIDF Research said.
Given the progressive reopening of the economy and the expected recovery in the job market, the research arm believed that a rebound in the momentum of consumer expenditure will boost the growth of retail sales further in the near term.
“In addition, the low overnight policy rate (OPR) and fiscal stimulus package such as i-Citra EPF withdrawal schemes, Bantuan Prihatin Rakyat (BPR) and Bantuan Khas Covid-19 (BKC) cash handouts, extension of wage subsidy programme and the six-month loan moratorium will continue to support consumer spending this year.
“Along with the recovery in household spending, the services sector is also expected to show positive growth in the latter part of the year.
“This will be further boosted by the reopening of the tourism sector for domestic travellers.”
That said, MIDF Research noted the prolonged closure of international borders will still remain a challenge for selected services providers, such as the aviation and hotel and accommodation industries, for the rest of the year.