KUALA LUMPUR, July 14 — A resilient consumption rate is expected to remain a key driver of Malaysia’s economic growth, cushioning the heightened global trade tensions and geopolitical uncertainties, said MIDF Amanah Investment Bank Bhd.
It opined that consumption will continue to expand, supported by labour market resilience, with higher employment and wage growth in domestically oriented sectors.
The low and stable inflation, along with targeted fiscal measures, will provide support to consumer purchasing power, while the recent Overnight Policy Rate (OPR) cut will alleviate borrowing costs, which could stimulate renewed interest in big-ticket spending.
"Moreover, the continued recovery in tourism, underpinned by increasing tourist arrivals, will provide an additional lift to consumer spending and support overall economic activity.
"That said, heightened global trade tensions, amplified by the latest round of United States tariffs, pose downside risks to consumer and business confidence, which may result in more subdued spending patterns," MIDF Amanah said in a note today.
Earlier today, the Department of Statistics Malaysia announced that Malaysia’s wholesale and retail trade registered total sales of RM154.3 billion in May 2025, a 4.4 per cent growth year-on-year, supported by the performance of the retail and wholesale trade sub-sectors.
MIDF Amanah expects retail sales to maintain their growth momentum this year, with growth projected at 4.6 per cent in 2025, albeit moderating from the 5.4 per cent expansion in 2024.
"This continued growth will be driven by a resilient labour market, low and stable inflation, as well as the recent monetary policy easing.
"The decline in borrowing costs is likely to enhance purchasing power and improve access to credit, encouraging greater consumer spending," it said.
However, MIDF Amanah noted that global trade tensions and rising uncertainties remain downside risks that could dampen consumer sentiment and spending.
— Bernama
