MIDF Research has maintained that Malaysia’s export and import projection is expected to expand slower by 9.2% and 9.5% year-on-year (y-o-y), respectively, this year, driven by the improvement in trade numbers in February 2023.
In a note on Monday, the research firm said Malaysia’s total trade grew 11% y-o-y to RM205 billion in February, remaining above RM200 billion for the 12th straight month and growing for the 27th month since December 2020.
“Expanding external demand for electric and electronics (E&E) and commodities, particularly petroleum and palm oil, will continue to drive export growth this year. However, the performance of commodity trade will be subject to the price effect, as current prices are relatively lower than last year.
“Meanwhile, we expect the pick-up in exports to China will support trade in coming months, as Malaysia stands to benefit from the reopening of China’s economy,” it said.
In addition, MIDF Research said trade with free trade agreement (FTA) countries would also grow, boosted by the ratification of trade agreements, namely the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (CPTPP).
“Nevertheless, we opine that several downside risks to trade outlook could come from weaker global demand, elevated inflation, excessive policy tightening, and possible re-escalation in geo-political and trade tensions,” it said.
