HLIB Research expects Malaysia’s consumer sector to remain supported by fiscal assistance, resilient spending and stronger tourism receipts, despite weaker consumer confidence.
Consumer confidence fell about 9% quarter-on-quarter to 123 points in quarter two calendar year 2026 (2QCY26), its lowest since 4QCY22.
However, private consumption still grew 4.8% year-on-year, while retail trade expanded 6.7% on average during the quarter, suggesting weaker sentiment has not translated into weaker overall spending.
HLIB attributes much of this resilience to government support. The 2026 STR and SARA allocation totals RM15 bil, while fuel subsidies and other assistance have helped households maintain spending despite real wages declining.
The research house expects Budget 2027 to potentially extend such support and anticipates a revision to the RM1,700 minimum wage.
Tourism provides another source of support. Although international arrivals were flat at 12.9 mil in the first half of calendar year 2026 (1HCY26), travel receipts increased 23.2% to RM62.2 bil, lifting estimated spending per tourist to about RM4,840.
The return of Formula 1 to Sepang from 2-4 October, coinciding with China’s Golden Week, could provide an additional boost.
On corporate results, seven of nine consumer stocks covered by HLIB met or exceeded expectations in 2QCY26.
Nestle and AEON were notable performers, while weaker results from MRDIY and KOPI were largely attributed to one-off or timing-related costs. HLIB expects sequential improvement for both companies in 2HCY26.
The research house expects consumer sentiment to recover as domestic pressures ease, while monitoring higher fuel, freight, CPO and coffee costs.
Near-term catalysts include Formula 1, Budget 2027, the next consumer confidence reading and the November results season.—Sept 29, 2026
Main image: ifreegroup.com
