KUALA LUMPUR, July 21 ― Research houses have projected a weaker trade balance for Malaysia in 2022 in view of rising imports against exports. In a research note today, Kenanga Research expects trade surplus to be relatively narrow amid rising imports driven by strong consumption and investment activities.
“Likewise, our growth is still susceptible to downside risks, and we maintain gross domestic product (GDP) growth for the second quarter of 2022 (Q2 2022) at 7.7 per cent (Q1 2022: 5.0 per cent), supporting the overall 2022 GDP growth forecast at 5.0 per cent to 5.5 per cent (2021: 3.1 per cent),” it added.
Malaysia’s exports expanded by 30.0 per cent year-on-year in Q2 2022 (Q1 2021: 22.0 per cent), with a year-to-date expansion of 26.1 per cent over the last six months, mainly attributable to Malaysia’s export diversification led by electrical and electronics (E&E) sector and elevated commodity prices.
Trade surplus stood at RM21.9 billion in June 2022 (May: RM12.7 billion), as exports rebounded sharply month-on-month at 21.3 per cent far exceeding imports at 15.2 per cent.
“Besides, we believe the surge in trade performance was also contributed by the weak ringgit and partly due to improvement in the global supply chain as China gradually reopened its economic activities.
Meanwhile, CGS-CIMB Research said it has maintained its current account surplus forecast for 2022 at 1.7 per cent of GDP.
It added that the international border reopening from April 1, 2022, and the subsequent arrival of foreign tourists could offset the weakened trade balance given that there are more inflows into the services account. ― Bernama
