KUALA LUMPUR: Malaysia's trade performance is expected to remain strong in the coming months, driven by its diverse export base and the low base effect, according to Hong Leong Investment Bank Bhd (HLIB Research).
The country's exports slightly eased but remained strong at 12.1 per cent year-on-year (YoY) in August, surpassing the consensus forecast of 11.8 per cent YoY.
Imports, on the other hand, accelerated to 26.2 per cent YoY.
"On a monthly basis, both exports and imports declined, with exports falling by 1.5 per cent and imports by 1.0 per cent, resulting in a narrower trade surplus of RM5.7 billion compared to July at RM6.4 billion)," it said.
In terms of key export markets, the US saw stronger export growth at 45.4 per cent YoY and China at 4.8 per cent YoY, driven by higher demand for electronics and electrical (E&E) products, machinery, equipment, parts, and rubber products.
HLIB Research noted that exports to the EU and ASEAN slowed, while exports to Japan declined.
"Overall, export growth was weighed down by a decline in commodity-related exports, offsetting the acceleration in manufactured exports.
"The fall in commodity-related exports negatively contributed 1.0 percentage point to overall export growth.
"Growth was mainly dragged by lower exports of petroleum products, following a decline in export volume and average unit values (AUV) of refined petroleum," it added.
Meanwhile, HLIB Research noted that the World Trade Organisation's (WTO) Goods Trade Barometer index increased to 103.0 in its September release (up from 100.6; baseline: 100).
"This indicates that trade activity is likely to stay positive in the near term, despite ongoing risks from geopolitical tensions and slower growth in advanced economies," it said.
As a result, HLIB Research has maintained its 2024 gross domestic product (GDP) growth forecast at 5.0 per cent YoY.