Maybank Maintains Exports, Imports Growth Projection For 2023
Malaysia's export growth slowed to 1.6% YoY in January 2023, the weakest rate in 27 months. This figure was lower than expected and a drop from December 2022's growth rate of 5.9% YoY.
Maybank says it maintains the exports and imports projections for the year for Malaysia, adding that the expansion will be slower this year.
"Despite weaker-than-expected trade figures in Jan-23, we maintain our projection for both exports and imports to expand slower this year at +9.2%yoy and +9.5%yoy, respectively.
"The moderation in growth will reflect the effect of high base last year, but the positive growth indicates continued rise in external demand for E&E and commodities, particularly petroleum and palm oil," says the analysts.
As price effect has been affecting palm oil exports, we foresee the relatively lower oil prices will also affect mining goods exports at least until 1HCY23.
"Meanwhile, we believe Malaysia, like other trading nations, will benefit from the recovery in external demand from China, which is expected to increase as China reopens its economy after strict lockdowns last year.
"In addition, trade with FTA countries will also grow boosted by the ratification of RCEP and CPTPP. On the flip side, we keep a cautious view that trade outlook may be weaker than expected, constrained by possible downside risks such as protracted fall in global demand, elevated inflation, and escalation of geo-political tension and trade war," it says.
Slowed Growth
Malaysia's export growth slowed to 1.6% YoY in January 2023, the weakest rate in 27 months. This figure was lower than expected and a drop from December 2022's growth rate of 5.9% YoY.
Despite this, stronger re-exports of 33.5% YoY, which offset the fall in domestic exports of 5.4% YoY, meant that overall export growth remained positive. In terms of sector performance, mining goods exports kept positive growth at 3.1% YoY, although this was slower than December 2022's growth rate of 31.6% YoY due to increased exports of liquefied natural gas, crude petroleum, and refined petroleum products.
Exports to major markets such as China and the US fell, with shipments to China down 11.9% YoY and exports to the US declining 0.6% YoY. Malaysia's total trade value in January 2023 of RM207.5bn was lower than December 2022's RM235.4bn, with both exports and imports falling 14.4% MoM and 8.6% MoM, respectively.
The value of total trade was the lowest in 11 months, but it has remained above RM200bn since March 2022. The total exports of Malaysia were still 1.9% YoY higher compared to January 2022, but it was the slowest growth since December 2020.
Despite the weaker-than-expected trade figures, projections for both exports and imports in Malaysia remain positive, albeit slower, with expected growth rates of 9.2% YoY and 9.5% YoY, respectively.
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