PETALING JAYA: Local businesses that sell and distribute goods to consumers, or what is termed “distributive trade” in industry parlance, saw a slight slowdown in growth in November 2025, with overall trade expanding 6.4% year-on-year (y-o-y) but dipping 1.2% month-on-month.
Economists say the moderation reflects short-term consolidation rather than weakening demand.
They expect consumer demand to remain resilient in 2026, supported by several factors, with the ringgit’s strength seen as a key driver in sustaining consumer spending through lower imported inflation.
Targeted government support measures, including subsidies and cash assistance, are also expected to cushion lower- and middle-income households.
“We maintain our view that private consumption will remain the key growth driver in the final quarter, supported by a favourable mix of policy support and cyclical tailwind.
“A resilient labour market, lower fuel prices, and a stable interest-rate environment are expected to continue bolstering household purchasing power.
“At the same time, manageable inflation is helping to preserve real income growth and sustain discretionary spending,” TA Research said in a note to clients yesterday.
It said firm domestic demand should help cushion the economy against external headwinds, including softer export momentum amid higher US tariffs and persistent global trade uncertainties.
Against this backdrop, TA Research maintained its 2025 gross domestic product (GDP) growth forecast at 4.7% y-o-y, anchored by resilient private consumption and steady expansion in the services sector, which are expected to remain the key pillars of growth through year-end.
Looking ahead, BIMB Research projects the distributive trade to grow 5.7% in 2026.
The wholesale and retail trade segments are expected to expand by about 5.4% and 6.5%, respectively, reflecting a healthy labour market, steady income growth and firm domestic demand.
The research house noted that the ringgit maintained a firmer footing through 2025, recording broad-based gains against major currencies, including the US dollar, Australian dollar and Japanese yen, backed by improved external balances, steadier capital flows and a more stable domestic macro backdrop.
“This appreciation has enhanced Malaysian consumers’ purchasing power, particularly for imported goods such as consumer durables, electronics and household items, helping to cushion global price pressures.
“For 2026, the ringgit is expected to strengthen further, averaging around RM4.00 against the US dollar (up from about RM4.28 in 2025), reflecting improving macroeconomic stability and expectations of a narrower interest rate gap between the US Federal Reserve and Bank Negara Malaysia,” added BIMB Research.
Meanwhile, Kenanga Research is slightly more optimistic, forecasting distributive trade growth to accelerate to 6.1% in 2026, supported by the Visit Malaysia 2026 momentum and resilient domestic demand.
“We expect growth to accelerate in December, supported by festive spending, year-end promotions, and rising tourist arrivals,” it said,
“A relatively strong distributive trade in the fourth quarter of financial year 2025 (4Q25) should support our 4Q25 GDP growth projection of 5% (versus 3Q25’s 5.2%), bringing full-year growth to 4.8% (2024: 5.1%).”
For 2026, the research house maintained its GDP forecast at 4.2%.
However, external headwinds remain.
Subdued global trade could weigh on export-orientated sectors, potentially affecting household confidence if labour market conditions weaken, economists caution.
