KUALA LUMPUR – Malaysia’s export sector outlook is expected to be positive in 2022, with trade primed to lead the country in returning to pre-pandemic growth in the middle of the year, Moody’s Analytics said.
However, it said the Omicron Covid-19 variant and extreme weather may pose a risk to supply chains.
“Vaccinated travel between Singapore and Malaysia has already been paused and the reopening of international travel will most likely be delayed,” it said in its Asia-Pacific Economic Preview report for the week of January 3-7.
It said although widespread lockdowns are unlikely, much will depend on the efficacy of vaccines against this new variant.
To recap, Malaysia’s November trade figures surprised on the upside, with exports soaring 32.4% year-on-year, following a 25.5% increase in October.
The trade balance, however, narrowed to RM18.9 billion in November from October’s record of RM26.2 billion, mainly due to a 38% yearly increase in imports as domestic conditions improved amid easing of Covid-19 restrictions.
Exports of electronics and petroleum products drove growth.
“Exports of electronics and related goods remained robust, as the global shortage of semiconductors continued to power demand.
“The chip shortage is expected to extend in 2022, supporting Malaysia’s manufacturing sector,” it said.
Meanwhile, the rating agency said the country’s crude oil exports are likely to be choppy in coming months as global economy contends with increased travel restrictions due to Omicron and Organisation of the Petroleum Exporting Countries+ production target negotiations.
As for palm oil exports, the crop saw exports jumping 90% yearly, driven by an increase in value and volume.
“However, flash floods in December 2021 and a migrant worker shortage will likely curtail supply in the coming months, and China, a palm oil main consumer, is also facing factory shutdowns in key cities as it pursues its strict zero-Covid-19 policy,” it added. – Bernama, January 3, 2022
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