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KUALA LUMPUR: Malaysia's distributive trade sector is expected to remain resilient into next year, supported by festive spending and rising tourist arrivals, Kenanga Research said.
The firm revised its 2025 distributive trade growth projection to 5.7 per cent from 5.0 per cent previously, citing stronger-than-expected momentum in recent months.
Sales growth is projected to accelerate further to 6.1 per cent in 2026, underpinned by Visit Malaysia 2026 initiatives.
Kenanga Research said sales momentum has averaged 5.3 per cent year-on-year in the first 10 months of 2025, exceeding its earlier target of 5.0 per cent, while October's strong performance points to a firm start to the fourth quarter.
"Momentum will likely hold in the near term, supported by festive spending, rising tourist arrivals and the government's Sumbangan Asas Rahmah RM100 cash transfers," it added.
Malaysia's distributive trade sales rose 7.2 per cent year-on-year in October, up from 6.6 per cent in September, marking the strongest growth since March 2023.
On a month-on-month basis, sales increased 1.8 per cent, the highest in three months and well above the 2025 monthly average of 0.5 per cent.
Sales value climbed to a record high of RM160.9 billion from RM158.0 billion in September, reflecting private consumption.
The overall momentum was driven mainly by stronger wholesale trade and motor vehicles sales.
Wholesale trade expanded 7.3 per cent year-on-year, reaching a 31-month high, led by machinery, equipment and supplies, which grew 10.0 per cent.
This was followed by non-specialised wholesale trade at 9.7 per cent and food, beverages and tobacco at 9.2 per cent.
Retail trade growth eased slightly to 6.8 per cent from 7.0 per cent in September, weighed by slower growth in non-specialised stores.
However, stronger sales in information and communication equipment helped cushion the moderation.
Motor vehicles sales surged 8.2 per cent, nearly doubling from September's 4.3 per cent growth, driven by a sharp increase in vehicle sales.
Monthly unit sales rose to 76,000 units in October from 58,500 units in September, while maintenance and repair activities also rebounded.
Kenanga Research expects solid distributive trade performance and robust October industrial production to lift Malaysia's fourth-quarter 2025 gross domestic product (GDP) growth to 5.0 per cent, above its earlier forecast of 4.0 per cent.
This would bring full-year 2025 GDP growth to 4.8 per cent, up from 4.5 per cent previously, though still slightly lower than 2024's 5.1 per cent expansion.
"However, due to financial market uncertainty and lingering geopolitical risk, we maintain our 2026 GDP forecast at 4.2 per cent for now," it said.
Source: https://www.nst.com.my/business/economy/2025/12/1336769/malaysias-distributive-trade-sector-seen-remaining-resilient-2026