KUALA LUMPUR, Jan 30 — RAM Rating Services Bhd expects Malaysia’s export growth to remain lacklustre at 3.1 per cent in December 2018 compared with 4.7 per cent in December 2017 on the back of weaker demand from key markets as front-loading activities dissipate.

In a statement, the ratings services agency said exports of major open economies in the region declined year-on-year in December, signalling slower global demand, and businesses were also expected to hold back orders while awaiting more clarity from the US-China trade dispute.

"In line with weaker demand for intermediate input for exports, imports are projected to contract by 3.1 per cent in December, giving rise to an overall trade surplus of RM12.0 billion,” it said.

In December 2017, imports rose 7.9 per cent.

Looking ahead, RAM Ratings said export stimuli for Malaysia would remain limited through the next few months amid uncertain global demand, chiefly arising from the US-China trade talks.

Despite the prevailing global uncertainty and volatility, the approved value of foreign investments in the manufacturing sector surged to RM33.6 billion in the third quarter of 2018, bringing the total approved value to RM48.8 billion for the first nine months of 2018 (2017 total: RM21.5 billion).

RAM Ratings said there was also a discernible increase in interest in the chemical and electrical & electronics sectors, which the ratings agency had previously identified as the key sectors in which Malaysia could benefit from the trade divergence arising from the US-China trade war.

RAM Ratings head of research Kristina Fong said it is very encouraging that Malaysia remains relevant and a key node in the global value chain.

"If these approved investments materialise, Malaysia will have added capacity to fully reap the benefits of this trade diversion, thereby supporting exports over the longer term,” she added. — Bernama