KUALA LUMPUR, May 21 ― Kenanga Investment Bank Bhd (Kenanga IB) has maintained its export growth forecast of 9.4 per cent for Malaysia this year (2023: minus 8.0 per cent) on the expectation that export growth will gradually improve in the coming months, especially in the second half of this year.

It said this was mainly due to the anticipation of the technology upcycle and China's economic rebound, supported by ongoing stimulus from the Chinese government.

“In addition, strong demand from regional economies and potentially a better-than-expected performance from advanced economies would also contribute to the positive outlook,” the research house said in a note today.

Kenanga IB noted that Malaysia’s exports rebounded sharply by 9.1 per cent in April after two straight months of decline, although this was below expectation, partly due to a lower base effect.

However, it has maintained a cautiously optimistic outlook, as the external trade outlook remains susceptible to external factors including the adverse effects of escalating geopolitical tensions and a potential economic slowdown in the advanced economies brought about by the higher interest rates environment.

Likewise, Kenanga IB continues to anticipate a sustained recovery in the manufacturing export-oriented sector, alongside positive domestic demand momentum to support its gross domestic product (GDP) outlook.

“That said, we maintain our 2024 GDP growth forecast (for Malaysia) of 4.5 to 5.0 per cent (2023: 3.7 per cent) on the back of a steadier growth momentum in the second half of this year,” it said.

Meanwhile, Public Investment Bank Bhd projected Malaysia’s exports of goods and services to grow by 5.4 per cent this year. It said the 2024 global semiconductor market is forecast to recover robustly, with expected double-digit growth of 13.1 per cent, surpassing prior estimates of 11.8 per cent.

“This positive outlook marks a crucial point for Malaysia’s manufacturing sector and the global semiconductor industry.

“Given that electrical and electronics (E&E) exports comprise over 40 per cent of Malaysia’s total exports, this projected upswing is particularly promising and the finance ministry anticipates a 5.5 per cent increase in manufactured goods exports for this year, reinforcing optimistic expectations,” it said in a note. ― Bernama