Malaysia’s trade performance to rebound in 2021
KUALA LUMPUR: Malaysia’s trade performance has been projected by analysts to rebound in 2021, with the country set to benefit from the strong recovery in its main trading partners China and the US.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), Malaysia’s trade performance is expected to rebound in 2021, carrying over the strong momentum in the second half of 2020 (2H20) on the back of resumption in activities globally driven by a return to normalcy in global supply chain.
“Competitive commodities prices and spare capacity will be an additional impetus to the recovery,” MIDF Research said.
“Investment appetite is also likely to improve propelled by better clarity amid vaccine availability. Malaysia will benefit from the strong recovery in our
Competitive commodities prices and spare capacity will be an additional impetus to the recovery.
MIDF Research
main trading partners China and the US.”
MIDF Research recalled that Malaysia’s capital goods imports had already been stressed since the end of 2018 due to heightened uncertainty over rising protectionism especially the US-China trade spat which halt expansion or new investment decisions.
“Covid-19 pandemic just added more salt to the wound.”
The research arm foresees President Joe Biden to remain suspicious about China, continuing former US President Donald Trump’s legacy to a certain extent hence risks to new investment at least from this angle remain high.
“Nevertheless, reduced uncertainty over the pandemic from vaccine distribution globally on top of businesses diversifying its production base away from China could improve sentiment and eventually uplift demand for capital imports.
“Vaccine rollout along with massive fiscal and monetary policy support in major economies will boost demand.”
All in, MIDF Research maintained its exports and imports growth forecast at 8.1 per cent and 8.7 per cent respectively.