Exports growth is expected to exceed forecast

By sector, Malaysia’s exports growth were underpinned by an expansion in manufacturing and agriculture sectors. — AFP photo

KUCHING (December 29): This year’s total exports growth is expected exceed analysts’ forecast, as exports have continued to expand for the fourth consecutive month to 32.4 per cent year-on-year (y-o-y) in November.

“In the first 11 months of 2021, total exports were valued at RM1.1 trillion, rose by 25.7 per cent as compared with 2020 (January to November).

“This was much higher than the 2018 record high export value of RM1.0 trillion. To add, for the first time, total trade value surpassed the RM2.0 trillion mark,” the research team at Kenanga Investment Bank Bhd (Kenanga Research) said.

However, in the near term, it cautioned that growth could be capped by the emergence of the Omicron variant, China’s tightening Covid-19 control and high airfreight costs.

“Nonetheless, in 2H22, we reckon that the supply chain disruptions may ease on the back of increased shipping capacity and as pent up consumer demand cools off, resulting in higher overall export growth,” it said.

Meanwhile, it noted that exports improved across almost all sectors and major export destination, partly due to November 2020’s low base effect.

By sector, Malaysia’s exports growth were underpinned by an expansion in manufacturing and agriculture sectors.

“However, the growth was partially softened by a moderation in mining sector, which hit the lowest in four months,” it noted.

Imports accelerated to 38 per cent, highest since May 2021.

“The growth was slightly higher than house forecast of 36.7 per cent and much higher than consensus (30.9 per cent), propelled mainly by the third straight month of expansion in retained imports,” Kenanga Research said.

Aside from that, it noted that trade surplus narrowed to RM18.9 billion compared with RM26.3 billion in October, as month-on-month imports outpaced exports.

Total trade expanded by 34.9 per cent y-o-y compared with 26.5 per cent in October, reaching RM205.5 billion, a new record high in value term.

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