Thursday 28 Mar 2024
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KUALA LUMPUR (Jan 8): CIMB IB Research has maintained its forecast of slower export growth of 9.8% in 2018F for Malaysia due to fading base effects and one-off gains, slower projected growth in China and a weaker ringgit.

In an economics update last Friday, the research house said  Malaysia's trade surplus narrowed from RM10.4 billion in October – the highest since March 2016 – to RM9.9 billion in November, as exports grew 14.4% year-on-year (y-o-y) and imports 15.2% y-o-y.

It said lower Oil and gas export volumes were a drag, even as oil prices trended higher, while manufacturing exports posted healthy but moderating growth rates.

“The steady gains in capital and consumer goods imports suggest domestic and external demand kept pace through 4Q17.

“The 20.4% y-o-y expansion in exports in 11M17 was broadly in line with our forecast of 18.9% y-o-y,” it said.

CIMB Research said Malaysia’s strong year-to-date rebound in exports has exceeded that of other tradedependent Asian nations: South Korea (+16.5% y-o-y in 11M17), Singapore (+11.3% y-o-y), Hong Kong (+8.2% y-o-y), Taiwan (+6.9% y-o-y) and China (+6.3% y-o-y).

“Nonetheless, we expect growth to moderate in 2018F to a respectable 9.8% due to 1) a high base in electronics exports driven by an exceptionally robust product launch cycle, 2) diminishing tailwinds from the commodity price rebound, 3) fading one-off gains from the plantation crop rebound, 4) moderating growth in China, and 4) a stronger ringgit,” it said.

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