KUALA LUMPUR (July 18): MIDF Amanah Investment Bank Bhd (MIDF) has maintained its projection that Malaysia’s goods exports will recover and grow at 5.2% this year compared to the -8% contraction in 2023.

The investment bank upgraded the import growth forecast to 11.2% (2023: -6.4%), given the more robust import growth of 13.8% year-on-year (y-o-y) in the first half of 2024 (1H 2024) vis-à-vis exports at 3.9% y-o-y.

"We foresee the turnaround in global electrical and electronics products (E&E) trade and the broad improvement in external demand to support the overall export recovery this year.

“Meanwhile, the continued growth in domestic economic and investment activities would support the robust growth in imports this year," MIDF said in a research note Thursday.

Although the trade is anticipated to recover, MIDF said it remains concerned that the ongoing geopolitical conflicts and trade tensions, as well as the weak growth outlook in major markets, such as the United States (US) and China, would negatively impact the trade outlook.

RHB Investment Bank Bhd (RHB IB) also maintains a positive outlook for Malaysia’s trade in 2024 despite a slower-than-expected export growth in June.

It noted that Malaysia's export foundation remains robust, supported by resilient economic growth momentum in major economies; a resurgence in the global technology cycle; and upside potential in commodity prices.

The investment bank also expects export-oriented sectors such as E&E products and commodity-based goods to benefit from brighter global growth prospects.

"Our sanguine view on the global economy remains unchanged, supported by the resilient economic performance of major economies such as the US, China, and some Asean economies.

"Malaysia is at the forefront of benefiting from the recovery in China's economy as key export products, namely E&E, machinery and transport equipment, and other manufactured goods, command the lion's share of trade in China's import demand," added RHB IB.

https://www.theedgemarkets.com/node/719541