Data Highlights

• Malaysia's Distributive Trade Index (DTI) rose moderately by 3.5% YoY to 158 points in September 2024, underperforming the 3.8% YoY growth recorded in the previous month. Despite this moderation, the DTI's performance remained supported by the continued resurgence in economic activity, driven by improvements in the labour market and manageable inflation throughout the month. On a month-on-month basis, the DTI declined by 0.3%, as compared with 0.3% MoM increase in August 2024. Meanwhile, Malaysia's Distributive Trade Sales also posted a moderate 3.5% YoY expansion, amounting to RM148.2bn, eased from the 4.7% YoY (0.7% MoM) growth seen previously.

• By subsegments:
  • The Volume Index for Wholesale Trade, holding the largest share of the total distributive trade at 44.9%, registered a 4.8% YoY (Aug24: 3.8% YoY) increase to 146.7 points.
     
  • The Retail Trade sector experienced a 3.8% YoY growth, reaching 181.0 points. Although this marks a positive gain, it is a slight deceleration compared to the 4.0% YoY growth recorded in August 2024.
     
  • On the other hand, the volume index of Motor Vehicles decreased -2.4% YoY (Aug24: 2.8% YoY) to 127.6 points. On a MoM basis, this segment declined by 8.8% YoY.
     
• Refer to Figure 3 for detailed performance data of each segment.

• In 9M24, the DTI registered an average YoY increase of 4.3%. Analysing this trend, the three-month moving average of the index in September 2024 showed a 4.3% YoY expansion, reflecting a slight deceleration from the previous average of 4.6% YoY.

• On a quarterly basis, the DTI rose by 4.3% YoY in 3Q24, slightly slower than the 4.6% growth recorded in 2Q24. As a recognised proxy for personal consumption expenditure, these DTI results align with the anticipated moderation in overall GDP growth for the third quarter. At the time of writing, the consensus’ expectations for Malaysia's 3Q24 GDP growth is 5.1% YoY, compared to the DOSM’s advanced estimate of 5.3% YoY, while our own projection is 5.2%. This trajectory reflects a moderation compared to the 5.9% YoY growth observed in 2Q24.

• Additional statistics supporting a moderating trend in 3Q24 include the release of the Service Index, which acts as a proxy for the services sector in Real GDP. The Volume Index of Services recorded a growth of 5.6% YoY in the third quarter of 2024, compared to 6.7% YoY in 2Q24. This performance indicates a likely deceleration within the services segment, reflecting a more moderate pace of expansion.

• The Statistics Department is scheduled to announce the 3Q24 GDP on 15th November. We maintain our GDP growth forecast at 5.2%, aligning with our full year a target of 5.0% (in comparison, the Ministry of Finance projected range of 4.8% to 5.3%).

Source: TA Research - 8 Nov 2024