Malaysia’s trade expected to recovery this year

<p style="text-align: justify;">Malaysia’s trade is expected to recover in 2021 backed by a recovery in global demand, especially for agricultural and manufactured goods, as Covid-19 threats recede following a massive global vaccination programme.</p> <p style="text-align: justify;">In its Economic Update today, Public Investment Bank Bhd (PIVB) said there would also be sustained global demand for information technology products amid a pandemic condition that increased demand for devices such as computers and tablets for home-based work and learning.</p> <p style="text-align: justify;">A global 5G network transition by 2025 may in turn underpin a surge in demand for 5G-enabled products, it said.</p> <p style="text-align: justify;">However, PIVB said trade may continue to be weighed down by the steep output cut by the Organisation of the Petroleum Exporting Countries and its oil-producing allies (Opec+) until at least the second quarter of 2021, and economic challenges in advanced and major economies due to Covid-19 headwinds especially in first half of this year.</p> <p style="text-align: justify;">Other possible hampering factors are a resurgence in new domestic Covid-19 cases that may push consumers to remain cautious and continue preserving capital as well as the uncertainty caused by the US-China second trade negotiations, which could begin as early as this quarter.</p> <p style="text-align: justify;">“Notwithstanding that, 2021 is expected to be a better year amid a removal of the single largest drag to growth, the Covid-19 pandemic, though growth may re-accelerate only in the second half of the 2021,“ said PIVB.</p> <p style="text-align: justify;">The bank noted several positive economic indicators, including the December 2020 trade surplus. “It (the surplus) remained impressive after surging by 64.9% y-o-y to RM20.7 billion in December 2020, pushing full-year surplus to RM184.7 billion, the highest on record, compared to RM146 billion in 2019,” it said.</p> <p style="text-align: justify;">It added that trade surplus may remain sanguine in 2021 driven by full economic openings across Asean and China as well as nascent global economic recovery due to rapid Covid-10 vaccination programmes.</p> <p style="text-align: justify;">However, this may be offset by the expected turnaround in imports, as well as uncertainty and risks from US-China second trade deal, it said.</p> <p style="text-align: justify;">Meanwhile, Maybank IB Research in its note echoed the view on a global economic recovery that would boost Malaysia’s trade performance.</p> <p style="text-align: justify;">It said both exports and imports were expected to rebound by 6.0% and 7.0%, respectively, with a trade surplus of RM187.8 billion in 2021.</p> <p style="text-align: justify;">In 2020, both exports and imports contracted for a second consecutive year -- by -1.4% (2019: -0.8%) and -6.3% (2019: -3.5%), respectively. – Bernama</p> <p style="text-align: justify;">An expected global economic recovery will boost Malaysia’s trade performance.</p> <p style="text-align: right;">Source: <a href="https://www.thesundaily.my/business/malaysia-s-trade-expected-to-recovery-this-year-YF6465908" target="_blank">The Sun Daily</a></p>