Malaysia Expected To Record Double-Digit Trade Growth In April

KUALA LUMPUR, May 27 (Bernama) -- Malaysia, which is expected to announce April trade figures on Friday, will likely record double-digit trade growth in tandem with the regional economy trend, according to observers. Positive trade growth is attributed to the progressive opening of the global economy and the gradual recovery of external demand from major trading partners notably China, Singapore and the United States. Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said Malaysia should be benefitting from the improving business sentiments globally following the recent JP Morgan Global Composite PMI, which continued to accelerate to 56.3 points in April from 54.8 points in the preceding month. In addition, the latest export statistics from South Korea and Taiwan show trade in these countries have been accelerating at a rapid pace of 41.1 per cent and 38.7 per cent in April, he noted. "As such, Malaysia’s exports should be able to record a decent growth rate in tandem with the regional economic trend. Lower base registered last year is also contributing to the double-digit growth reading. In that sense, exports in April are likely to have a strong positive print," Mohd Afzanizam told Bernama. On May 5, IHS Markit said Malaysia's manufacturing sector recorded growth as its Purchasing Managers’ Index climbed above the neutral 50.0 mark for the first time in ten months and for only the second time since September 2018. Malaysia recorded a PMI of 53.9, the fastest rate of growth in the series’ history since mid-2012. Industry estimates expect Malaysia’s exports for April 2021 to increase by 51 per cent, in line with healthy trade performance experienced by neighbouring countries, notably Singapore and Indonesia, which grew by double digits of 34.7 per cent and 40.8 per cent. However, Mohd Afzanizam said the underlying trend would be affected by the Movement Control Order due to strict adherence of standard operating procedures and limitations in human mobility. ActivTrades trader Anderson Alves said Malaysia's trade data is set to continue to print a trade surplus following strong readings in the first quarter amid the recovery of demand for exports from the manufacturing sector across Asia and globally. “The data should mark its highest reading since the start of the pandemic in March last year and revisions to the upside on the previous data are also on the radar. March exports should continue to show impressive numbers," he told Bernama. Alves said the vaccine roll-out was starting to pick up worldwide and this could boost global trade and help Malaysia's exports in the coming quarters. "There is also growing expectation of free trade talks with the European Union. However, as a commodity-exporting country, some pressure could emerge from any trade restrictions from China on the region and also headwinds from the pandemic restrictions globally," he pointed out. Moody's Analytics senior Asia Pacific economist Katrina Ell said Malaysia's exports are forecast to surge by 51 per cent year-on-year (y-o-y) in April from a low base. "We forecast imports to rise by 16.9 per cent y-o-y in April. In particular, imports of consumption goods are a bright spot due to the festive period,“ she told Bernama. Ell said Malaysia’s exports slumped by 25 per cent y-o-y in April 2020 as the COVID-19 pandemic caused mass disruption to exports and hefty falls in commodity prices. "Commodity prices, including for crude oil and palm oil, have since recovered strongly, supplementing Malaysia’s export receipts through the first half of 2021," she added. The positive outlook is also shared by the industrial sector. Industry members are appreciative of the government for allowing the economic sector to continue to operate during the MCO 3.0 period subject to stricter standard operating procedures. Federation of Malaysian Manufacturers (FMM) president Soh Thian Lai said the government's decision to tighten the current MCO 3.0 without imposing a full lockdown is critical for business sustainability and to reduce loss of employment. “Our members who are actively exporting have greatly contributed to Malaysia’s export performance which has been showing a positive growth trajectory since September 2020. We are also thankful to Malaysia External Trade Development Corporation (MATRADE) who enabled us to continue marketing our Malaysian products internationally, with the use of digital technology.” E-platforms provided by MATRADE enable companies to participate in online business meetings or eBizMatch with foreign buyers to seek export opportunities. Further business opportunities are also explored by the Ministry of International Trade and Industry (MITI), together with MATRADE (Malaysia’s national trade promotion agency) and Malaysian Investment Development Authority (MIDA) during the recent Trade and Investment Missions (TIM) to Japan, South Korea, Saudi Arabia and the United Arab Emirates to connect Malaysian exporters with buyers from these markets. Additionally, Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai said: “I am optimistic that the export performance, especially for semiconductors in the upcoming months, will be strong due to the rising demand for semiconductors used in smart devices and 5G network underpinned by work-from-home trend as well as the automotive industry. On behalf of MSIA members, I am grateful to the government’s decision not to impose total lockdown during MCO 3.0 as we are able to continue to be part of the global supply chain.” Meanwhile, Malaysian Rubber Glove Manufacturers Association (MARGMA) president Dr Supramaniam Shanmugam said: “2020 has been a booming year as Malaysian made gloves were highly sought after by the international market amid the COVID-19 pandemic. The elevated demand for rubber gloves is expected to continue this year.” “Hence, it is not surprising that exports of rubber products would increase tremendously in April 2021 and the following months as the government has shown its support by keeping the economy open during this challenging period. What’s more, local glove manufacturers have received rising orders from foreign countries as gloves are essential in the healthcare industry.” -- BERNAMA