MIDF Research raises Malaysia's 2022 exports, imports growth projection
20/09/2022 (The Edge Markets), Kuala Lumpur - MIDF Research has raised its 2022 growth projection for the country’s exports and imports to 22.4% and 29.5% respectively.
For the first eight months of this year, exports grew by 30.8% year-on-year (y-o-y), while imports growth was at 36.7% y-o-y, it said in a note on Tuesday (Sept 20).
“Overall, we maintain our assumption that elevated commodity prices and growing external demand for electrical and electronics (E&E) and commodities (petroleum and palm oil) support export growth this year.
“Meanwhile, the reopening of the economy and increased domestic demand contributed to the surge in imports,” said MIDF Research.
The research house is, however, cautious that the trade outlook may be constrained by several downside risks such as weaker global economic growth amid rising global inflation, possible recession in the United States and Europe, sluggish recovery in China, and intensified geo-political tensions.
It highlighted that Malaysia’s exports to major markets will continue to be driven by E&E, on the back of increased activities in the global supply chain and a continued rise in global demand.
It also noted that there were signs of diversification to new markets for palm oil exports.
“For the agriculture sector, although the sector’s exports growth accelerated to +47.9% y-o-y, thanks to the lower base, the monthly decline in exports of palm oil and palm oil-based agriculture products can be explained by the price correction and supply constraints.
“We expect the relatively lower prices [to] limit the sector’s exports growth, but possible diversification to new markets may help support palm oil exports,” it said.
Malaysia’s total trade grew strongly by +56.5% y-o-y to RM265.7 billion, as both exports and imports increased from the previous month.
Exports growth picked up to +47.9% y-o-y, the strongest increase in 16 months and higher than MIDF Research and market expectations, partly because of the lower base in August 2021.
The robust growth in August 2022 also suggests a correction in commodity prices, and concerns about the sluggish recovery in China have yet to affect Malaysia’s trade performance.