What drove MIDF to raise Malaysia’s 2022 trade growth forecasts?

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MIDF Research Raised Malaysia's 2022 Trade Growth Forecasts Due to Strong Performance Driven by Key Sectors and Elevated Prices

MIDF Research revised its 2022 growth projections for Malaysia's exports and imports upwards to 22.4 per cent and 29.5 per cent, respectively. This adjustment was primarily driven by the robust performance observed in the first eight months of the year, with exports growing by 30.8 per cent year-on-year (y-o-y) and imports by 36.7 per cent y-o-y. The sustained elevated commodity prices and strong external demand for electrical and electronics (E&E) goods, petroleum, and palm oil were key factors supporting this upward revision.
Sustained Demand for E&E and Commodities Bolstered Exports

The research indicated that external demand for Malaysia's electrical and electronics (E&E) products, along with commodities like petroleum and palm oil, has been a significant contributor to export growth. Increased activity within the global supply chain and a continued rise in global demand for E&E goods are expected to maintain this momentum. For palm oil, while monthly declines were noted due to price corrections and supply constraints, there are emerging signs of diversification into new markets, which could help sustain export performance.
Economic Reopening and Domestic Demand Fueled Import Surge

The reopening of Malaysia's economy and the subsequent increase in domestic demand played a crucial role in the surge of imports. As economic activities resumed and consumer confidence improved, the demand for goods and services increased, leading to higher import figures. This domestic-driven demand, coupled with external factors, contributed to the overall positive trade performance observed in the initial months of 2022.
August Trade Performance Exceeded Expectations

Malaysia's total trade demonstrated strong growth in August 2022, expanding by 56.5 per cent y-o-y to RM265.7 billion. Exports, in particular, saw a significant pickup, growing by 47.9 per cent y-o-y. This robust performance in August, which was partly attributed to a lower base in August 2021, suggests that recent commodity price corrections and concerns surrounding China's economic recovery had not yet materially impacted Malaysia's trade figures.

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What drove MIDF to raise Malaysia’s 2022 trade growth forecasts?

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