Friday 29 Mar 2024
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KUALA LUMPUR (Feb 2): Malaysia's trade activity is expected to recover in 2021, with gross exports to grow 5.3% to 10.9%.

CGS-CIMB’s economists Michelle Chia and Lim Yee Ping said Malaysia’s exports surged 10.8% year on year in December, exceeding both their and consensus’ forecasts, driven by robust external demand for semiconductors, healthcare supplies and palm oil.

“Looking beyond the near-term risks to the economic outlook arising from MCO 2.0, we expect trade activity to recover, buoyed by a gradual reopening of the economy, vaccine deliveries, fiscal and monetary stimulus and pent-up demand,” they said.

They reiterated their forecasts for gross exports at 10.9% (-1.4% in 2020) and gross imports to rebound 11.5% (-6.3% in 2020).

“This is resulting in a 2021 trade surplus of RM200 billion or 13% of gross domestic product (GDP) and support the current account surplus, projected at 2% of GDP in 2021 (versus 2.8% in 2020),” they said.

TA Securities’ economists Shazma Juliana Abu Bakar and Farid Burhanuddin also forecast exports to sustain strong growth in 2021 in line with better economic prospects due to recovery in global trade and supply chains.

“The improvement in exports will be also supported by the improving demand around the world,” they said while expecting full-year export and import growth to be at 5.3% and 5.6%, respectively.  

Meanwhile, Affin Hwang Capital’s economists Alan Tan, Naomi Margaret Kasimir and Mas Aida Che Mansor said they believed growth in exports will likely recover to a rate of 7% to 7.5% in 2021, compared with growth in imports of 7.5% to 8%.

“In the months ahead, we believe there is still some downside risk to external demand from the elevated number of Covid-19 cases in the Asean region, as well as in other countries such as the US, UK, Germany and Japan, which has led to the extension or reinstatement of containment measure,” they said.

Edited BySurin Murugiah
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