09/02/2012 (Business Times) - Data on external demand for Malaysian products in December last year is expected to come in weaker, said economists.

International Trade and Industry Minister will announce the latest trade data today and provide an overview of the trade performance for 2011.

A Business Times poll expects exports to expand by an average of 4.93 per cent, imports by 5.42 per cent and the trade balance to average RM10 billion.

RHB Research expects exports to weaken due to the eurozone crisis and demand for the manufacturing sector to be affected.

"The bright spot may be the US in terms of growth as demand from China could get worse on slowing growth," said its economist Peck Boon Soon.

DBS Bank economist Irvin Seah said December's data will reflect the impact of the headwinds on the export as well as the industrial sector.

He expects headline export growth to moderate further to 6.6 per cent year-on-year, from 8.0 per cent in the previous month.

Import growth is also expected to ease, he said, given the weakening consumer sentiment and cautious investment demand.

"Essentially, the set of data reflects the declining external demand against an uncertain and volatile global economic environment," he said.

The prospects for the external sector will continue to be underpinned by the situation in the developed economies.

"Although economic conditions in the developed economies have improved slightly in the past month, the situation remains fluid."

As it is, a comprehensive resolution to the European debt crisis has yet to materialise and recovery in the US has remained lacklustre while Asia itself is also slowing.

"With that, the overall export and industrial performance are expected to remain subdued in the coming months before better growth materialises in the second half of the year," added Seah.

"Even the positive price effect from commodity exports which has supported overall export performance for most part of last year is also dissipating."

Oil prices have moderated in recent months but upside risk has surfaced again on account of the political tension in the Middle East.

According to Citi, palm oil exports will likely accelerate in December.

The Palm Oil Registration and Licensing Authority data showed that the growth of the combined value of palm oil and palm kernel oil exports rising to 16.2 per cent year-on-year from November's 12.4 per cent.

It noted that China's imports from Malaysia, in ringgit terms, slowed slightly to 10.4 per cent in December, while Japan's imports from Malaysia also moderated.

"The moderating decline in Singapore's imports from Malaysia, however, provide some offset," it added.

Import growth is also likely to moderate with the moderation in China's exports to Malaysia and the decline in Japan's exports to Malaysia.