KUALA LUMPUR (June 17): Despite expectations of strong growth in trade performance in 2022, Malaysia will be affected by aggressive US interest rate hikes, according to Malaysia External Trade Development Corporation (MATRADE) chief executive officer Datuk Mohd Mustafa Abdul Aziz.
“Definitely, there will be an impact, but it’s still premature for us [to comment on this]. You see, our stock market also has been impacted," Mustafa told The Edge after the launching of the 18th Malaysia International Halal Showcase (MIHAS 2022) event here on Friday (June 17), organised by MATRADE.
The US Federal Reserve raised interest rates by 75 basis points on Wednesday in a historic move to fight inflation and forecast a slowdown in the economy and rising unemployment in the coming months.
Commenting on the impact of the US rate hike on Malaysia, Mustafa said there is a need for Malaysia to work extra hard to push exports and explore new markets.
On the impact of the Russia-Ukraine war on the country’s trade performance, Mustafa said the impact was not much.
Mustafa said that as for Russia, the export is only 0.3% while Ukraine is 0.1% of total trade.
According to MATRADE data, in 2021, Russia was Malaysia's 33rd largest export destination representing only 0.3% share, and 24th largest import source (0.5%). As for Ukraine, it was the 59th largest import source (0.1% share) and 69% largest export destination (0.1% share).
Mustafa added that he is optimistic Malaysia would see positive growth in trade in 2022, as the country reached RM2.2 trillion in trade value in 2021, the fastest growth since 1994.
"Our target is still RM2 trillion, but higher than last year," he said.
This, he said, will be driven by MIHAS 2022, which is expected to continue as a catalyst for the country’s trade performance this year. This is in tandem with the 12th Malaysia Plan, which projects Malaysia’s halal industry will contribute 8.1% of gross domestic product and generate export revenue totalling RM56 billion by 2025, compared to 6.6% and RM30.5 billion respectively in 2020.
MIHAS 2022 is breaking new ground beyond traditional halal segments. The country’s halal exports in 2021 were mainly driven by food and beverage (RM17.6 billion), followed by halal ingredients (RM13.5 billion), cosmetics and personal care (RM2.4 billion).
“We are excited to connect established brands and newcomers to explore the potential of the vast global halal market. I would like to take this opportunity to invite the business community to participate in this event,” said Mustafa.
MATRADE’s flagship event will be held at the Malaysia International Trade and Exhibition Centre (MITEC), here, from Sept 7 to 10, 2022.