Economists have revised Malaysia’s full-year export forecasts after the steeper-than-expected export contraction in April, reported Xinhua.UOB (United Overseas Bank Limited) Global Economics and Market Research said in a note on Friday that the year-to-date export contraction of 2.6 per cent in Malaysia suggests that its existing 2023 full-year export growth projection of 1.5 per cent is no longer valid.In view of persistent threats to the export outlook and negative base effects becoming more apparent in coming months, the research house trimmed Malaysia’s 2023 full-year export growth projection to -7 per cent.In comparison, Malaysia’s exports surged 25 per cent year-on-year in 2022. The Central Bank of Malaysia projected Malaysia’s export to grow 1.5 per cent in 2023.According to the UOB, key downside risks for Malaysia’s exports include geopolitical tensions, potential financial instability stemming from monetary policy tightening, and a pronounced growth slowdown in advanced economies.“In sum, we think exports may continue to stagnate as the growth outlook across the world is poised to slow further entering the second half,” it said.Malaysia’s exports declined for a second straight month and most sharply since October 2022 by 17.4 per cent year-on-year in April, as a result of a shorter working month, high base effects a year earlier, lower commodity price earnings, and dimmer global growth prospects.The reading came in worse than the UOB estimate of -2.5 per cent.The steeper-than-expected export contraction last month was weighed by all three economic sectors and almost all products, except for the refined petroleum products.Meanwhile, Kenanga Research said in a note on May 22 that given the weaker-than-expected trade performance in April and subdued year-to-date performance, it downgraded Malaysia’s 2023 export forecast to -4.2 per cent from 5.8 per cent as there is a high probability that exports could contract further in the near term.This is mainly due to the high base recorded last year, coupled with relatively lower commodity prices and the normalisation of economic activities as well as tighter financial conditions brought by the aggressive monetary policy tightening in advanced economies to tame inflation, said the research house.However, at this juncture, Kenanga maintained Malaysia’s 2023 gross domestic product (GDP) growth forecast unchanged at 4.7 per cent despite a slowing external trade trend in the first month of the second quarter.This is largely due to the expectation that domestic demand fuelled by tourism recovery, steady labour market conditions, and further expansion in the services sector will mitigate the slack in the commodity-related and manufacturing export-oriented sectors, according to Kenanga.However, this will also be contingent on the pace of economic recovery from China and backed by the progress of federal government spending on infrastructure projects and higher implementation rate of foreign direct investments (FDIs), it added. (ICE KUALA LUMPUR)

Fonte notizia: 22 Maggio 2023, Bernama