KUALA LUMPUR – AmBank Research expects exports to grow around 23% to 25% in 2021, which is significantly better than the 1.1% contraction recorded in 2020, as external demand is seen to remain favourable in the remaining months of the year.
The research house said the global recovery, added with the further domestic reopening, has also bolstered Malaysia’s exports.
“Nevertheless, we remain cautious over Covid-19 infections and ongoing constraints in the global supply chain that could affect the strength of growth in Malaysia’s trade sector,” it said in a research note today.
In October 2021, Malaysia’s exports grew faster by 25.5% year-on-year to a new record of RM114.4 billion in value, exceeding September’s 24.7% growth and the market consensus projection of 25.0%, reflecting sustained healthy external demand conditions amidst progress in global economic recovery.
On a monthly basis, exports climbed 3.2% month-on-month albeit at a slower pace compared to 15.9% in September 2021, bringing average exports for the first 10 months of 2021 to 26.5%, way higher than AmBank Research’s forecast of 23%.
The research house said the robust foreign trade performance and healthy global economic growth continued to underpin the performance of strong exports, with electronics and electrical, petroleum products, palm oil, and chemicals all benefitting.
“Our trade was also lifted by the firm commodity prices as well as imports that continued to recover. These are expected to grow in the coming months due to improved business conditions and domestic economic activities, following the relaxation of restrictions and further reopening of the economy,” said AmBank Research.
It added that another positive factor was the government’s approval of the move to bring in 32,000 foreign workers to ease the labour shortage, which would boost firms’ capability to meet export orders.
However, rising Covid-19 infections and the ongoing constraints in the global supply chain would act as the key downside risks, which could affect the strength of growth in Malaysia’s trade sector, said AmBank Research. – Bernama, November 30, 2021
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