Are Exports Set To Rebound in 2024?

Malaysia's exports are set to rebound to positive territory in 2024. This is supported by a re-acceleration in the global technology cycle as well as better economic prospects of major trade partners. The November export data was worse than consensus expectations, but this maybe a blink.

The Department of Statistics Malaysia (DOSM) reported that the country's exports decreased 5.9% to RM122.1 billion in November, due mainly to lower demand for electrical and electronic products.

The contraction was worse than Bloomberg consensus estimate of a 5.2% decline, and RHB's projection of a 4.0% decline. The November export performance was worse than expected due to weakness in electrical and electronic shipments as well as a sharper fall in exports to major destinations like China and the US.

Meanwhile, overall trade saw a moderate decrease of 2.4% year-on-year (y-o-y) to RM231.79 billion in November, said the Ministry of Investment, Trade and Industry.

However, Malaysia maintained its trade surplus during the month, valued at RM12.41 billion, making it the 43rd consecutive month of trade surplus since May 2020, albeit the smallest surplus in the three and a half years. MIDF Research expects the momentum for external trade recovery to continue into 2024, following an upside bias in 4Q2023.

It maintained its forecast that exports and imports will recover next year, a pick-up from projected declines of 7.6% for exports and 7.0% for imports y-o-y, in 2023.

Similarly, UOB expects an export growth rebound of 3.5% in 2024, reinforced by signs of a further recovery in the global tech cycle, an expected improvement in China’s economy and a projected soft landing in the advanced economies with gradual monetary policy loosening going into next year.

Hopefully, 2024 will be a year of better exports and trade surpluses, and a more positive outcome in GDP. Business sentiment remains cautious. It is for the Madani Government to harness further private sector initiative without focussing on some political irritants like race and religion.

Reference:

Exports set to rebound in 2024, economists say after November’s drop. Emir Zainul

Theedgemalaysia.com, 20 December 2023