KUALA LUMPUR, April 28 — Malaysia is expected to continue its stellar exports growth in the first half of 2021 (1H21), said research houses.

In its ‘Global Economics & Market Strategy’ report released today,  RHB Research said export growth will be aided by a combination of elevated commodity prices, strong demand in electrical and electronics, and the low base effect.

“For 2H21, growth should remain elevated although at a lesser pace. 

“This includes some correction to the commodity prices, while the low base effect would have a lower impact as exports perform well in 2H20,” it said. 

RHB Research added that as the nation’s vaccination drive picks up, the ensuing stronger global demand is likely to offset some of the downsides.

It also said the stronger-than-estimated growth likely reflects the overall increase in global demand for goods.

In particular, exports to the United States (US) had recorded exceptionally high growth of 67.5 per cent year-on-year (y-o-y), said the research house.

Meanwhile, in its analysis titled ‘Malaysia: Foreign Trade’, Moody’s Analytics noted that Malaysia has benefited from well-diversified trade.

Malaysia’s trade surplus rose to RM24.2 billion in March 2021, up from RM17.9 billion in February 2021, with 96.1 per cent y-o-y growth, it said. 

Moody’s Analytics added that the stellar trade performance with the nation’s top three major partners, namely China, Singapore and the US, points to a more optimistic recovery ahead.   

“However, Malaysia should remain vigilant to the risks of trade tension between the US and China and resurgence of COVID-19 infections in major partner countries.

“We expect the strong growth in exports and imports to taper off in 2H21,” said Moody’s Analytics. 

It noted that Malaysia’s trade performance for March 2021 outperformed all expectations with exports skyrocketing by 31 per cent y-o-y to RM104.95 billion, while imports increased by 15.9 per cent month-on-month (m-o-m) or 19.2 per cent y-o-y to RM80.79 billion.

Given the low base year comparison, exports increased by 19.8 per cent m-o-m, which translated to a RM17.3 billion increase in value compared with the previous month. 

“In the yearly term, exports value grew by RM20 billion compared with the pre-pandemic March 2019 level, underscoring strong growth in the trade sector,” added Moody’s Analytics.


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