KUALA LUMPUR, March 29 — MIDF Research has maintained its 2021 growth forecast for Malaysia’s exports and imports at 8.1 per cent year-on-year (y-o-y) and 8.7 per cent y-oy, respectively.
It expects Malaysia’s trade performance to rebound this year, carrying over the strong momentum in the second half of 2020, amid resumption in global economic activities.
“Competitive commodities prices and spare capacity will be an additional impetus to the expected recovery.
“Investment appetite is also likely to improve propelled by better clarity amid Covid-19 vaccine availability,” it said in a note today.
It expects Malaysia to benefit from the strong recovery in main trading partners China and the United States.
MIDF Research also anticipates the vaccine rollout to boost demand, along with massive fiscal and monetary policy support in major economies.
It views the crisis in the Suez Canal as a temporary setback.
Nevertheless, the research house believes it is still premature to assess the impact of the Suez Canal blockage caused by container ship, ‘Ever Given’ that ran aground last week, on Malaysia’s trade performance.
It does see the situation in the canal which is a key transit point connecting Europe and Asia as causing stress to global supply, impacting transportation of a wide range of goods, from oil and gas to consumer goods.
“For now, the impact to trade is viewed to be minimal, at most causing some delays in shipment,” it added.
Should the crisis prolong, MIDF Research said it could significantly affect trade flows.
“This is because shifting routes and delays are likely to increase costs, adding more burden to the global supply chain recovering from the Covid-19 shock,” it added.
According to the research house, Malaysia’s total trade last month rose 15.4 per cent y-o-y.
It said exports and imports advanced 17.6 per cent and 12.7 per cent y-o-y, the fastest pace since October 2018 and June 2018, respectively.
“As exports grew higher than imports, the trade surplus widened by 41.6 per cent y-o-y to RM17.9 billion.
“Breaking down exports, both domestic and re-exports surged 10.4 per cent and 65 per cent y-o-y respectively,” it said.
On a monthly basis, however, total trade declined 3.3 per cent, as exports and imports fell 2.3 per cent and 4.5 per cent month-on-month, respectively. — Bernama
