KUALA LUMPUR, June 17 — A significant slowdown in the European Union (EU) economic growth is a key vulnerability for Asean exports amid the economic bloc’s importance as a key export market for many Southeast Asian economies, said S&P Global Market Intelligence today.
Its Asia-Pacific chief economist Rajiv Biswas said “a much greater vulnerability” for the Asean region is from the macroeconomic shocks to major economies in the EU from the Russia-Ukraine war, notably through higher energy prices and potential disruption of Russian oil and gas supplies to the EU.
He said Malaysia’s direct exports to Russia are very small, accounting for around 0.3 per cent of total Malaysian merchandise exports.
“A more significant vulnerability is from the negative economic shock of the Russia-Ukraine war on the economies of Western Europe, since the EU accounts for 8.4 per cent of Malaysia’s merchandise exports,” Rajiv said in S&P Global Market Intelligence’s “Week Ahead Economic Preview” released today.
He noted that Malaysia’s manufacturing exports have shown strong growth in early 2022, with a 17.8 per cent year-on-year growth for the first four months of the year, helped by rising exports of electrical and electronics products, petroleum products and chemical products.
As a major exporter of commodities, Rajiv said Malaysia was also benefiting from higher world prices for oil and gas as well as palm oil.
Malaysia’s exports of mining goods rose by 60 per cent year-on-year in the first four months of 2022, helped by rising export values for liquefied natural gas and petroleum products.
Palm oil and palm oil-based products accounted for 7.8 per cent of Malaysia’s merchandise exports by value in 2021.
Helped by surging palm oil prices, Malaysia’s exports of palm oil and palm oil-based agricultural products rose by 70 per cent year-on-year in the first quarter of 2022.
— Bernama
