DOMESTIC consumer spending remains solid despite ongoing global uncertainties, bolstered by proactive government measures and a recovering tourism sector, according to analysts.
A report by MBSB Research noted that Malaysia’s retail sector continues to demonstrate resilience, largely due to sustained fiscal support through targeted cash assistance programmes such as the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA).
These initiatives help maintain purchasing power among households, while sustaining demand for essential goods at value-driven retailers, including chains such as 99 Speedmart.
“The foundations of domestic consumption remain firm, supported by stable employment, manageable core inflation, ongoing fiscal support, and the revival of tourism,” the report stated.
Looking ahead, analysts predict that the retail and food and beverage sectors will continue to benefit from the anticipated increase in foreign tourist arrivals as Malaysia prepares for Visit Malaysia Year 2026.
The influx of international visitors is expected to generate positive spillovers for local businesses, further strengthening domestic economic momentum.
However, the MBSB Research analysis also highlighted growing pressures on the cost of living arising from global geopolitical tensions.
The ongoing conflict between Iran and Israel has moved beyond a mere risk factor, directly affecting global supply chains. Disruptions to shipping operations in the Strait of Hormuz have led to surging logistics costs, higher prices for fertilisers, and increased packaging expenses.
Based on six weeks of heightened tensions, the research team projects average global oil prices to rise to around US$90 per barrel this year.
In response, MBSB Research has lowered earnings forecasts for thirteen local consumer companies by between 1.0 and 8.0 per cent.
“The transmission channels vary by subsector, including rising costs for animal feed, weaker consumer spending, and increased packaging and distribution expenses,” the report said. Key pressures include higher soy and corn prices raising poultry feed costs, logistics expenses burdening retailers, and rising polymer prices affecting food and beverage manufacturers.
The findings indicate that global geopolitical conflicts are beginning to bite into the domestic economy, particularly through elevated costs for everyday goods, posing challenges for both consumers and local businesses alike. - March 30, 2026
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