KUALA LUMPUR, Nov 29 — Despite the recent encouraging developments in trade, MIDF Research has maintained its projection for exports to grow 19.8 per cent in 2021 compared to minus 1.1 per cent in 2020.
The research firm said this is because the slowdown in China, the recent resurgence of Covid-19 infections in some countries and the ongoing supply challenges might affect exports growth in the coming months.
“Similarly, the robust imports growth in October 2021 pushed the year-to-date imports growth higher at 21.8 per cent. Nonetheless, we keep our full-year imports growth for this year unchanged at 18.9 per cent compared with minus 5.8 per cent in 2020,” it said in a research note.
MIDF said it does not rule out the possibility that Malaysia’s imports will grow stronger than its current projection, subject to the strength of the domestic economic recovery in the final two months of this year.
“We keep a cautious outlook on the pace of recovery, although the relaxation of lockdown restrictions and increased pent-up demand may contribute to stronger domestic economic activities in the fourth quarter of 2021 (Q421),” it added.
Malaysia’s total trade increased further by 26.5 per cent year-on-year to a historical high of RM202.6 billion in October 2021 as both exports and imports increased to record highs of US$114.4 billion (RM484 billion) and US$88.2 billion, respectively.
While the reopening of the economy supported growing imports, the further relaxation of full lockdown restrictions allowed businesses to benefit from the sustained growth in external demand.
The research house said the robust growth in October 2021 suggested a steady expansion in the external trade activity as the record exports number in October 2021 resulted in the growth of 25 per cent year-on-year in the first 10 months of 2021.
“This increases the likelihood that the overall exports this year may perform stronger than expected.
“This has been supported by the rise in global demand for electrical and electronics products and commodity-based products, especially palm oil and petroleum products which were also influenced by the high commodity prices,” it added. — Bernama