20/11/2023 05:58 PM

KUALA LUMPUR, Nov 20 (Bernama) -- Malaysia’s exports are expected to recover by early 2024 on the assumption that the global technology cycle has bottomed while tapering inflationary pressures along major economies implies that monetary policy tightening among major central banks is at the tail-end.

In its Economic Research note today, AmBank Group said that the Nasdaq PHLX Semiconductor index, which correlates with exports growth, suggested that the semiconductor industry hit its low point at the end of the first half (1H) 2023 and has since embarked on a recovery path, offering positive signs for 2024. 

A similar trend is seen in the World Semiconductor Trade Statistics (WSTS) where semiconductor net billings have posted positive growth in September 2023, after declining since mid-2022.

Based on the latest forecast from the 2024 Economic Outlook by the Finance Ministry (MoF), Malaysia’s real export is expected to grow by 5.1 per cent in 2024 after contracting in 2023. 

On the global trade development, the World Trade Organisation expects trade to grow by 3.3 per cent in 2024 (2023 estimate 0.8 per cent), to coincide with an upswing in global trade, driven by steady gross domestic product growth. 

“Taking all these into consideration, we view that the Malaysian economy will grow by 4.0 per cent in 2023, and 4.5 per cent in 2024,” said AmBank Group.

Meanwhile, MIDF Research maintained its forecast that exports and imports would fall by -6.4 per cent and - 6.9 per cent, respectively, in 2023.

So far, the average growth for both exports and imports in the first 10 months stood at -7.2 per cent year-on-year (y-o-y) and 7.0 per cent y-o-y, respectively.

“With the expected improvement in the final quarter of 2023, there is an upside bias such as a stronger recovery in China and a better turnaround in electrical and electronic (E&E) trade which will make the full-year decline not as steep as we estimated.

“Given the declines and the weak performance this year, we foresee external trade will continue to recover and this will support exports and imports to rebound next year,” said MIDF Research in its Economic Review note today. 

It added that factors which could weigh down on trade outlook, among others, are a significant slowdown in the advanced economies and escalation of geopolitical and trade tensions, which could adversely affect the stability of global trade flow and movement in global commodity prices. 


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