KUALA LUMPUR: MIDF Research projected exports and imports growth to moderate to 9.2 per cent and 9.5 per cent in 2023 respectively, after their strong 25 per cent and 31.3 per cent expansion last year.

The research house said the ongoing increase in demand for electrical and electronic (E&E) goods and commodities would continue to drive Malaysia's exports, while the sustained rise in domestic spending and business activities would support the import outlook going forward.

"We anticipate a positive effect on exports from the ratification of trade agreements, i.e. Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

"Nevertheless, we caution on the possible drag to global trade and production activities given the expected slowdown in global growth, particularly in the advanced economies," it said.

MIDF Research added that escalation of geopolitical tensions, trade wars and renewed pressure on the global supply chain could also negatively affect the trade outlook.

"Moderating this, we expect the reopening of China's economy will help to boost the global growth outlook and contribute to improved external demand from within Asia," it said.

For December 2022, while external trade continued to grow, it moderated to a single-digit increase, with total trade expanding 8.6 per cent year-on-year, said MIDF Research.

"The continued growth in overall exports, however, was driven mainly by increased E&E exports.

"Exports growth moderated to 6.0 per cent year-on-year, the slowest expansion since July 2021, dragged by weakness in shipments to China and palm oil exports," it added.

- BERNAMA