Data Highlights

• Malaysia's Distributive Trade Index (DTI) accelerated by 5.1% YoY to 159.9 points in October 2024, better than the 3.5% YoY growth recorded in the previous month. The DTI's performance was 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 grew by 1.2%, as compared with 0.3% MoM contraction in September 2024. Meanwhile, Malaysia's Distributive Trade Sales also posted a better 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 robust 6.1% YoY (Sept24: 4.8% YoY) increase to 146.8 points. 
     
  • The Retail Trade sector experienced a 5.0% YoY growth, reaching 182 points. This is as compared with lower growth recorded since July this year. 
     
  • In addition, the volume index of Motor Vehicles rebounded by 1.6% YoY (Sept24: - 2.4% YoY) to 138.9 points. On a MoM basis, this segment grew by 8.8%.
     
• In 10M24, the DTI registered an average YoY increase of 4.4%. Analysing this trend, the three-month moving average of the index in October 2024 showed a 4.1% YoY expansion, reflecting a slight deceleration from the previous average of 4.3% YoY. 
   
• The gain in October provides an early indication that personal spending will remain a key driver of overall GDP growth in the fourth quarter. With the RON95 fuel subsidy rationalisation deferred to mid-2025 and inflation remaining manageable so far, the downside risks to personal spending this year appear limited. Furthermore, the labour market's recent performance and tourism activities continues to underpin domestic economic expansion, supported by stable employment levels and incremental wage growth. We maintain our forecast for personal spending growth at approximately 6.0% YoY in 4Q24, up from 4.8% YoY in 3Q24 (YTD: 5.3% YoY). Similarly, we uphold our GDP growth projection of 4.7% for the same period, aligning with our full-year estimate of 5.0% YoY for 2024. 

Source: TA Research - 12 Dec 2024