PETALING JAYA: The country’s consumption momentum is expected to carry through the final quarter, with distributive trade activity likely to remain resilient despite external uncertainties.
Forward indicators point to steady household spending, supported by favourable domestic conditions and policy support.
In its latest assessment of distributive trade performance following October’s data release, TA Research said: “We maintain our view that private consumption will remain the primary growth driver in the final quarter, supported by a confluence of policy support and favourable cyclical conditions.”
The brokerage noted that as of the first 10 months of 2025, Malaysia’s distributive trade index (DTI) expanded by an average of 4.5%, broadly stable and slightly stronger than the 4.4% growth recorded in the same period of 2024.
The year-to-date performance had already surpassed the 2024 full-year average of 4.3%, reflecting sustained household spending resilience.
Growth continued to be anchored by wholesale trade, retail trade and a rebound in the motor vehicle segment.
TA Research noted: “A robust labour market, lower fuel prices and a stable interest rate environment are expected to enhance household purchasing power, further reinforced by the government’s one-off RM100 Sumbangan Asas Rahmah or Sara cash transfer.”
It added that subdued inflationary pressures continue to support real incomes and sustain discretionary spending.
For context, Malaysia’s distributive trade growth strengthened in October 2025, with DTI expanding 5.7% year-on-year (y-o-y) to 169.1 points, accelerating from September.
In value terms, distributive trade sales rose 7.2% y-o-y to RM169.1bil. On a month-on-month basis, trade volume increased 1.5% while trade value edged up 0.2%, signalling continued consumption traction.
TA Research said the resilience came despite a challenging and uncertain global backdrop, adding that spending was underpinned by a robust labour market, stable household income conditions and targeted government assistance programmes.
Festive-related demand and lower pump prices following the Budi95 mechanism also helped ease cost pressures and support discretionary spending.
By sub-segments, wholesale trade recorded 6.7% y-o-y volume growth and retail trade grew 4.6%, while the motor vehicles segment rebounded sharply with a 7.2% increase.
Against this backdrop, TA Research said: “Importantly, resilient domestic demand should act as a buffer against external headwinds, including softer export growth amid heightened US tariffs and persistent global trade uncertainties.
“We therefore maintain our 2025 gross domestic product growth forecast at 4.7% y-o-y, anchored by resilient private consumption (5.6% y-o-y) and a steady expansion in the services sector (5.1% y-o-y).”
