KUALA LUMPUR: MIDF Amanah Investment Bank Bhd Research (MIDF Research) has forecast Malaysia’s exports growth to moderate further at 3.6 per cent in 2019 from 6.7 per cent in 2018 amid higher base effects and continuous signs of easing key global indicators.
In a note yesterday, the research house said the moderating pace was consistent with global commodity prices and expectations of a slight slowdown in overall business performance, on top of uncertainty over the Sino-United States trade conflict.
According to statistics released by the Ministry of International Trade and Industry (MITI) yesterday, Malaysia’s exports in February 2019 fell 5.3 per cent year-on-year (y-o-y) to RM66.6 billion, and imports also declined 9.4 per cent y-o-y to RM55.54 billion.
However, trade surplus rose 22.7 per cent y-o-y to RM11.06 billion in February 2019, making it the 256th consecutive trade surplus month since November 1997, said the ministry.
Commenting on that, MIDF Research said the decline in exports for that month was primarily due to a short calendar month on top of long Chinese New Year holidays.
“During this holiday, all Chinese factories were shut down with most of them closed one or two weeks prior to the festive holidays.
“As the celebration put a halt to mass production, it disrupted the global supply chain resulting in a weak trade performance,” it said.
On the first quarter 2019 (Q1 2019) outlook, the research house expected Malaysia’s exports to perform modestly, in line with the regional partners’ trade performance.
“Based on our regional partners’ trade performance in Q1 2019, exports growth of Vietnam moderated to 3.7 per cent y-o-y compared with 6.3 per cent y-o-y growth in Q4 2018, while those of South Korea shrunk 8.6 per cent y-o-y, total opposite to a growth of 8.1 per cent y-o-y in the previous quarter,” it said, hence, anticipating a similar trend for Malaysia’s exports.
“Risks resulting from the US-China trade spat to the global economy remain as the duo have not finalised any agreement,” it said. – Bernama
