Reimposition of tighter restriction a temporary setback for export industries

LUMPUR: The reimposition of tighter domestic restrictions from June 1-14 is a temporary setback for the economy as the export-oriented industries will also feel the brunt, said Ambank Research.

This was due to operations and/ or transportations restrictions as well as disruption in the domestic supply chain, it said.

In a research note, the research outfit said, however, the sector is expected to rebound faster post-phase one of the movement control order (MCO) given the improving global demand as Malaysia’s key export products and trading partners remain fairly strong and expectations of a better domestic vaccination rate.

In April, the continued recovery in external demand amid a low-base effect had pushed the month’s exports reading to its fastest growth since March 1998, up 63.0 per cent year on year (yoy).

Imports grew 24.4 per cent yoy in April while the trade surplus narrowed to RM20.5 billion, bringing the year-to-date export growth to 29.6 per cent, it noted.

“Nevertheless, we remained cautiously optimistic that the business operation environment could be restored fairly quickly, assuming another round of targeted stimulus measures are injected and a gradual phase-out of containment measures in the early second half of this year.

“For now, we are maintaining our projections for exports and imports to grow by 15 per cent and 13 per cent, respectively,” it added.