Distributive trade sales rebounded marginally in September (0.2% YoY;Aug:-2.3%)due to a lower base effect, marking its first expansion since the pandemic hit in February
Sales value (RM110.8b) remained above pre pandemic level (Feb: RM109.0b).
MoM (-0.6%; Aug: 2.5%): growth turned negative, reaching a five-month low as demand recovery loses momentum.
3Q20 (-1.9%; 2Q20: -22.6%): contraction moderated sharply following an improved demand after COVID-19 lockdown measures were relaxed in June.
Improvements in motor vehicle sales and retail trade partially capped a worsening contraction in wholesale trade
Motor vehicles (17.1%; Aug: 1.0%): soared to a record high, on the back of a significant expansion in motor vehicle sales (34.8%; Aug: 3.1%) and growth in the sale, maintenance, and repair of motorcycles (9.4%; Aug: 2.4%).
Retail trade (1.1%; Aug: -1.5%): rebounded to a seven-month high, driven by growth of sales in non-specialised stores (7.6%; Aug: 4.7%) and sales of food, beverages & tobacco (8.2%; Aug: 5.7%).
Wholesale trade (-4.2%; Aug: -3.9%): fell further due to weak sales of other specialised items (-14.2%; Aug: -13.5%).
Retail performance across advanced and developing economies remained mixed
Japan: contraction worsened to -8.8% (Aug: -2.0%) a four-month low on the back of plummeting consumer demand.
China: rose to 3.3% (Aug: 0.5%), its highest level since Dec-19, resulting from a strong economic recovery after successfully managing the COVID-19 pandemic.
2020 distributive trade sales forecast retained at -5.5% to -4.5% (YTD: -7.7%; 2019: 5.9%)
Recovery in distributive trade sales is expected to continue on the back of additional fiscal stimulus coming into effect in 4Q20. However, this recovery will be heavily weighed by the current surge in COVID-19 cases and the extension of lockdown measures in some states.
Given the lesser growth contraction of distributive trade sales in the 3Q20, private consumption growth is expected to rebound in 3Q20 (4.1%; 2Q20: -18.5%) with GDP growth estimated to contract by less at -4.6% compared to -17.1% in 2Q20. Consequently, 2020 GDP growth forecast is expected to settle at -5.5% (2019: 4.3%).
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