Background Summary 

Trade continued to decline – Malaysia's total trade dropped by 2.4% y/y in November 2023, with exports declined by 5.9% y/y to RM122.1 billion while imports increased by 1.7% y/y to RM109.7 billion.

Contraction across all the sectors – Exports from the manufacturing sector and the agriculture sector declined on a year-on-year basis. Exports of mining products recorded a positive growth.

Imports increased by 1.7% y/y – Mainly supported by imports of capital goods, which increased by 53.3% y/y.

Our Prognosis 

Exports recovery may take place by early 2024 – Exports are expected to recover by early 2024 on the assumption that the global tech cycle has bottomed while tapering inflationary pressures along major economies implies that monetary policy tightening among major central banks is at the tail-end.

Slower growth for 2023 – We expect the Malaysia’s economy to grow by 4.0% in 2023, and 4.5% in 2024 following exports contraction envisaged for the full year 2023 which is also partly explainable by the high-base effect.

Source: AmInvest Research - 20 Dec 2023