KUALA LUMPUR, Oct 19 — MIDF Research has upgraded its projections for exports and imports to grow at 26 per cent and 30.5 per cent, respectively, as external demand has remained robust despite concerns over slowing global growth.
The research firm expects more moderate growth rates for both exports and imports in the final few months of 2022 as the low-base effect diminishes.
“Thus far, exports and imports rose by 30.3 per cent year-on-year (y-o-y) and 36.2 per cent y-o-y, respectively, in the first nine months of 2022,” MIDF Research said in a note today.
It said the trade sector stands to benefit from elevated commodity prices, growing external demand for electric and electronic (E&E) products, and commodities such as petroleum and palm oil.
Imports would expand further on the back of growing domestic demand, increased business activities and consumer spending.
“Nevertheless, there are several risks to the near-term trade outlook, mostly from external uncertainties such as deterioration in the global growth outlook, weaker final demand (as a result of rising inflation and borrowing costs), and escalation of geopolitical tensions,” MIDF Research said.
According to the Ministry of International Trade and Industry (Miti), Malaysia’s trade continued its upward trajectory in September 2022, rising by 31.4 per cent to RM256.91 billion compared to the same month last year – the 20th consecutive month of double-digit growth.
Exports increased by 30.1 per cent to RM144.31 billion, marking the 14th successive month of double-digit growth, while imports expanded by 33.0 per cent to RM112.60 billion.
Malaysia’s trade surplus achieved a new record high in September, expanding by 20.9 per cent to RM31.71 billion, Miti said.
MIDF Research expects the trade surplus will be sustained in anticipation of lower imports and continued expansion in external demand.
It added for the three months to September this year, the trade balance rose to RM64.3 billion, or 10.8 per cent higher than the second quarter and 5.6 per cent more compared to the third quarter (Q3) in 2021.
“This indicates stronger external trade contribution to Malaysia’s growth domestic product (GDP) growth in Q3, 2022,” MIDF Research said.
By destination, the research firm noted that exports to Asean and other destinations like the United States and European Union remained strong although the pace of growth mostly moderated in September, again indicating a more normalised growth.
It foresees that the fading low base effect will lead to more normalised growth in the coming months, but in general, the sustained demand for E&E products and commodities would support Malaysia’s exports to major countries.”
— Bernama
