STRONG MARCH EXPORT TO CONTRIBUTE POSITIVELY TO Q1 GDP -- UOB MALAYSIA

KUALA LUMPUR, April 28 -- United Overseas Bank (Malaysia) Bhd (UOB Malaysia) expects the stronger-than-expected export growth of 31 per cent year-on-year (y-o-y) in March will contribute positively to the overall gross domestic product (GDP) in the first quarter of 2021 (Q1 2021).

Senior economist Julia Goh said the strong export growth of 18.2 per cent y-o-y in Q1 2021, propelled by the strong performance in March, augured well for the current account surplus and helped to cushion the impact of COVID-19 containment measures on overall GDP during the quarter.

She said the RM58.6 billion trade surplus in Q1 2021, compared to RM59.9 billion in Q4 2020, was estimated to translate into a current account surplus of about RM18 billion, against RM19 billion surplus in Q4 2020.

“Exports increased at a faster pace relative to imports, hence net trade is expected to contribute positively to overall GDP in Q1 2021,” she said in a statement today.

Commenting on March trade data released by the Malaysia External Trade Development Corporation (MATRADE), she said the year-to-date export momentum was in line with the bank’s expectations supported by improving global demand, ongoing trade diversion and diversification, global tech upcycle and favourable base effects.

“The technology upcycle and acceleration in digital transformation will continue to drive demand for Malaysia’s electrical and electronics (E&E) products, while the ongoing COVID-19 containment and precautionary measures would support external demand for Malaysia’s rubber and medical-related products.”

Goh said overall, UOB Malaysia reiterated its 2021 full-year export growth forecast of 15 per cent against a 1.4 per cent contraction in 2020.

“Potential upside catalysts to our export outlook include progressive global vaccination rollouts and faster reopening of international borders.

“On the other hand, downside risks could come from new COVID-19 variants and delays or less effective vaccines that could slow the global recovery,” she added.

According to MATRADE, exports in March accelerated by 31 per cent, surpassing the RM100 billion mark for the first time to reach RM104.95 billion.

 In Q1 2021, exports increased 18.2 per cent y-o-y to RM282.14 billion and imports rose by 10.8 per cent to RM223.51 billion, which saw trade surplus expand by 58.6 per cent y-o-y to RM58.63 billion.

--BERNAMA