PETALING JAYA: Retail Group Malaysia (RGM) is revising upwards its 2019 growth forecast for the country’s retail sales to 4.9% from 4.5% previously, following the better-than-expected growth rate in the first quarter and a pick-up in the second quarter.
Despite weak internal and external economic environment, the higher growth expected during the second quarter of 2019 was mainly due to the Hari Raya period.
This largest festival in Malaysia is celebrated earlier this year compared to 2018, the report said.
RGM is maintaining the retail sale growth rate for third quarter at 3.9%.
The report said that it is normal for a quarter experiencing a “higher growth” as a result of a major festival to be followed by “slower retail growth” in the following subsequent quarter.
It is maintaining estimated growth rate for the October-December quarter at 5.8%, supported by the school holidays and year-end festivals.
The report said expected higher economic activities should stimulate consumers’ spending during this period.
On a quarterly basis, the Malaysian retail industry achieved a better-than-expected growth rate of 3.8% for the Jan-March 2019 period, compared to a year ago.
Despite “a lacklustre performance” during the Chinese New Year period, the retailers managed to generate more turnover than expected, the report said.
“The average inflation rate during the first quarter of 2019 was -0.3%. Malaysia recorded deflation during the first two months of the year ... the first time since November 2009,” the report said.
RGM said all retail sub-sectors recorded improvements during the first quarter of 2019, except for the department store sub-sector, which performed “below” expectations, the report said.
It fared better when combined with the supermarket sub-sector, generating “a strong growth rate” of 6.2% for the Jan-March 2019 period compared to a year ago.
The report said although the super/hypermarket sub-sector saw a negative growth at -2.3%, it was “better” than an earlier March estimate that the sector would experience a -7.6%.
RGM noted that the Malaysia economy recorded a moderate growth rate of 4.5%, compared with 3.8% for retail sales.
“Higher public expenditure and sustainable private consumption contributed to the latest economic growth,” the report said.