Analysts sanguine on Malaysia’s trade outlook in 2024
Analysts remain sanguine on Malaysia’s trade outlook in 2024, driven by an improvement in exports momentum.
In a report, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) said despite the decline in exports in 2023, it still expect recovery in external demand will support better exports performance going forward in view of better regional trade performance.
“In view of improving electrical and electronics (E&E) exports and better export performance reported by several regional countries, we expect maintain our projection that external trade will recover this year.
“We forecast goods exports and imports to rebound in 2024 and grow at 5.2 per cent (2023: down eight per cent) and 4.4 per cent (2023: down 6.4 per cent).
“Apart from the turnaround in the global E&E market, we expect continued (albeit moderate) economic growth in China and the US will support export growth this year,” it opined.
Sharing its sentiments, the research team at RHB Investment Bank Bhd (RHB Investment) remarked: “We maintain our sanguine view of Malaysia’s trade outlook for 2024, where the export momentum is anticipated to pick up in the first half of 2024 (1H24).
“Our view is founded on three key catalysts; a rosier global and regional economic outlook, more positive economic dynamics of China, and the re-acceleration in the global technology cycle.
“We expect the exports to rebound by 4.3 per cent y-o-y in 2024 versus a decline of eight per cent in 2023.
“The rising trend of capital and intermediate goods also signalled the potential expansion in manufacturing activities in the near term and improvement in investment in investment appetite.”
It also pointed out that global growth is envisaged to accelerate in 2024 amid a pause in global interest rate hikes with rate normalisation anticipated by 2H24, inflation risks to dissipate over the same period and China’s economic recovery by 2024.
“We maintain our aboveconsensus forecast for the US and China economies, where their GDP are anticipated to expand by 2.2 and five per cent in 2024, respectively.
“For Asean economies, our RHB leading indices suggest that GDP growth momentum will accelerate into 1Q24 and be sustained for 1H24 on the back of a rosier global growth backdrop.
“The possibility of rate cuts and easing monetary conditions by 2H24 would further support the global economic conditions,” the research team said.
Higher import demand from China is also anticipated as the economic momentum in China has begun to gather steam.
“Malaysia would be at the forefront to benefit from the recovery in China’s economy as key export products, which are E&E, machinery and transport equipment, and other manufactured goods, command the lion’s share of trade in China’s import demand.