KUALA LUMPUR: Malaysia is poised for a rebound in its exports of goods and services, with a projected growth rate of 5.4 per cent this year, buoyed by an anticipated global trade recovery and a promising outlook for electronics exports amidst the ongoing tech cycle revival.
According to insights from Public Investment Bank Bhd (PublicInvest), despite Malaysia's dependency on the economic performance of major players like the US, China and the EU, there is optimism for improvement in Asean trade dynamics this year.
However, the landscape is not without its complexities. Major elections scheduled in key trading partners such as the US, South Korea, and India introduce additional variables that could influence international trade patterns.
Moreover, the escalation of the Red Sea Crisis looms as a significant threat, with potential disruptions to global supply chains and consequent increases in business costs.
"Despite these risks, an expected surge in electronics exports and positive base effects may mitigate some of the negative impacts.
"Therefore, we anticipate Malaysia's goods and services exports to rebound by 5.4 per cent in 2024, accompanied by a projected import growth rate of 6.8 per cent, though subject to revision should global conditions deteriorate," stated the research house in a note today.
Public Invest further highlighted the optimistic outlook for major electrical and electronics products (E&E) exporters like Malaysia, noting that E&E exports constitute over 40 per cent of the nation's total gross exports.
Additionally, the Ministry of Finance anticipates a significant 5.5 per cent increase in manufactured goods exports for 2024, further bolstering positive sentiment.
Furthermore, the International Monetary Fund (IMF) projects a 3.1 per cent expansion in global GDP, primarily driven by improved growth prospects in the world's largest economies, notably the US and China, both of which are pivotal trading partners for Malaysia.
"This enhanced global economic outlook is expected to be supported by increased private and public expenditures, greater labor force participation, improved supply chain dynamics, and more favorable energy and commodity prices," Public Invest added.
Source: https://www.nst.com.my/business/economy/2024/03/1028056/exports-goods-and-services-grow-54pc-2024