Malaysia Retail Chain Association (MRCA) president, Datuk Seri Garry Chua said the good relations between Malaysia and China after the revival of the East Coast Rail Line (ECRL) project could also result in a boost in the tourism sector.
"The expectation is also in line with the gross domestic product's growth projection of between 4.3% and 4.8%,” he said at the sidelines of the Retail Industry Forum here on Wednesday.
However, he said the food and beverages (F and B) sector is expected to experience a slowdown due to financial constraints among Malaysians, leading to lower spending power.
The F and B sector grew 2.6% per cent in 2018 -- a performance which is expected to be maintained this year.
Chua added that with the boost in the tourism sector, the retail industry could experience a double-digit growth, otherwise, the market sentiment would remain sluggish.
"By 2020, Malaysia will have about 600 to 700 malls, and Malaysia only has 32 million people, which is relatively low.
"If tourism does not increase, business would not be performing. This will lead to shop closures and thus a glut in retail space," he added.
He said the retail segment recorded a slow growth of between 2% and 4% in the last six years, compared with the double-digit growth before that.
"The increase in tourism will have a fast ripple effect on the economy as they are big spenders. I believe that we need to catch up with our neighbouring countries in promoting tourism as it will contribute to a significant spin-off to
the economy which we are lacking right now," he said.
According to Tourism Malaysia's statistics, the number of tourist arrivals has been almost stagnant over the past four years, with 25.72 million arrivals in 2015, 26.76 million in 2016, 25.95 million in 2017 and 25.83 million in 2018. - Bernama