MALAYSIA’S consumer sector is expected to remain resilient, supported by strong macroeconomic fundamentals, policy measures and structural growth drivers, MBSB Investment Bank said.

In a research note, the investment bank said measures under the 13th Malaysia Plan, including higher minimum wages, cash aid and fuel subsidies, would help sustain household incomes.

Together with the recent 25-basis-point cut in the overnight policy rate, these initiatives are expected to boost disposable incomes and support household spending power.

“This is further supported by stable labour market conditions, a benign inflation outlook and a firm recovery in tourism, with stronger ASEAN and Chinese arrivals fuelling retail, food and beverages, and discretionary demand.

“On the cost side, a firmer ringgit and easing input costs should improve margins, enhancing earnings visibility,” MBSB said.

Coupled with the sector’s defensive tilt, where staples continue to provide resilience, the consumer sector remains well positioned to outperform in a volatile market, it added.

MBSB also said the consumer sector is well positioned to benefit from tourism-driven consumption, as the rebound in tourist arrivals provides a structural uplift for consumer-oriented businesses, particularly across fast-moving consumer goods, convenience retail and discretionary segments.

It said increased foot traffic in airports, malls and tourist hotspots is expected to translate into stronger demand for bottled beverages, ready-to-eat snacks and casual dining. — BERNAMA