KUALA LUMPUR: Malaysia’s exports are likely to weather a challenging storm this year, weighing on the on-going trade tension between US and China, prospect of cooling global growth, China’s slowing economy and sluggish demand for commodities.
Kenanga Research said the market was cautiously optimistic of a positive outcome from the on-going trade talks between US and China, citing that the latter had been aggressively supporting its domestic economy to prevent a hard landing.
“For 2019, we forecast exports to grow between four per cent and six per cent in line with a slower projected gross domestic product growth of 4.7 per cent from an estimated 4.8 per cent in 2018 on the back of slower global trade and economy,” it said in a research note today.
Malaysia’s total trade remained resilient with a 5.9 per cent growth to RM1.88 trillion last year from RM1.77 trillion recorded in 2017, according to the International Trade and Industry Ministry.
The country’s exports rose 6.7 per cent to RM998.01 billion from RM935.39 billion in 2017, while import for 2018 increased 4.9 per cent to RM877.74 billion from RM838.14 billion.
This led to widened trade surplus of 22.1 per cent to RM120.27 billion, the fastest growth rate in 10 years.
Public Investment Bank Bhd said Malaysia’s trade was likely to remain volatile in the next two months as the outcome of trade negotiation would only be known by the end of February.
“We are cautiously optimistic that trade situation may improve beyond February that may be a precursor to the reacceleration and normalisation of global trade,” the firm said.