Retail Group Malaysia upgrades sales growth outlook for 2018

KUALA LUMPUR: Retail Group Malaysia (RGM) has revised upwards its projected sales growth rate for the local retail industry in 2018 to 5.3% from 4.7% estimated in March 2018, based on the latest quarterly adjustments.
The consulting firm said members of the Malaysia Retailers Association (MRA) are hopeful that their business will recover by the second quarter of 2018, projecting an average growth rate of 6.0%, even after the retail industry recorded a below-than-expected growth rate of 2.6% in the first quarter.
"The change in ruling party after the general election is expected to boost consumers' confidence level and increase their willingness to spend. At the same time, the largest festival in Malaysia, Hari Raya, will be celebrated in June this year," RGM said.
RGM has adjusted the second quarter retail sales growth forecast to 6.3% from 3.7% estimated in March 2018. The revised number is higher than the latest projection by MRA members. This new estimate takes into consideration the tax holiday during the last month (June) of the second quarter as well as the Hari Raya Aidilfitri celebration in the middle of this month.
"Many retailers, large and small throughout the country, have taken this once-in-a-life-time opportunity to offer great discounts to attract shoppers to buy. Higher expenditure from tourists, including Singaporeans, is also expected during this period," RGM said.
The retail sales growth rate for the third quarter has also been revised from 5.2% (estimated in March 2018) to 6.8%. This revision takes into consideration the remaining two months of the tax break before the Sales and Services Tax is reintroduced from Sept 1.
For the last quarter of this year, the retail growth rate forecast has been revised downwards from 5.0% (estimated in March 2018) to 3.5%.
The adjustment is needed to reflect higher consumers' spending during the three-month period with zero-rated Goods & Services Tax. Major purchases are expected to be made from June to August of this year.