KUALA LUMPUR, Sept 4 — Malaysia’s exports growth is expected to ease further to 1.5 per cent in 2020 from the 2.2 per cent estimated for this year, according to RHB Research.
The escalation of the US-China trade friction had posed greater downside risks for global growth, which could further weigh on the country’s external trade and economic growth for next year, it said.
“We project Malaysia’s economic growth to moderate further to 4.3 per cent in 2020 from an estimated 4.5 per cent for 2019,” RHB Research said in a note today.
It made the forecast after the release of the Department of Statistics’ data showing a mild rebound in July exports which grew 1.7 per cent year-on-year (y-o-y) to RM88.0 billion. Imports, however, continued to shrink by 5.9 per cent y-o-y to RM73.7 billion.
RHB Research said the July reading was slightly higher than its estimate of a 1.4 per cent export growth.
“Electrical and electronics (E&E) exports saw a strong rebound of 4.5 per cent y-o-y in July, after plunging six per cent in June, led by a recovery in shipments of electrical machinery and apparatus and exports of telecommunication equipment accelerated to their fastest pace in almost two years,” it said.
Meanwhile, shipments of office machines and data processing equipment continued to fall for the ninth straight month, albeit by a slower pace during the month.
Non-E&E exports also recovered to record a growth of 2.8 per cent y-o-y (June: -4.9 per cent), but in contrast, commodity exports reverted to a drop of 13.4 per cent y-o-y, following a brief 14.3 per cent rise in June. This came as crude oil and palm oil exports fell.
By destination, RHB Research noted that exports to China, Hong Kong and Asean rebounded in July, while shipments to Japan fell by a smaller margin. Exports to the US remained firm, albeit slowing, while shipments to the EU slipped into a decline.
However, it said, imports remained weak, contracting for the second straight month, albeit by a smaller margin of 5.9 per cent y-o-y in July, from -9.8 per cent in the previous month due to smaller declines registered by imports of capital and consumption goods. — Bernama