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PETALING JAYA: Malaysia’s trade started the year with positive momentum, auguring well for an expected rebound in external trade to support firmer economic growth for 2024.

Maybank Investment Bank Research (Maybank IB) said the external trade figures in January may have been boosted by shipments ahead of the extended shutdowns domestically and regionally for the Chinese New Year holiday.

The calendar effect can be expected to show up in the February 2024 number, so the key is to see how the two months of 2024 compared with the two months of 2023 plus post-February 2024 monthly trends, it said.

“For this year, we currently forecast exports and imports to rebound by 4.7% and 5.6%, respectively.

“A major driver for the projected exports rebound this year is the projected turnaround in the electronics cycle as the World Semiconductor Trade Statistics expects global semiconductor sales to rebound by 13.1% in 2024 (2023: -8.2%),” the research firm said in a statement.

Meanwhile, Public Investment Bank Bhd (PIVB) said the anticipated upswing in the global semiconductor market this year is particularly promising for major electrical and electronic (E&E) exporters like Malaysia, given that exports of E&E products constitute over 40% of the nation’s total gross exports.

Furthermore, the finance ministry anticipates a substantial 5.5% increase in manufactured goods exports for 2024, further underpinning the optimistic sentiment.

However, it said, Malaysia’s vulnerability to global economic fluctuations, particularly in the electronics and semiconductor sectors, is underscored by anticipated modest global economic growth in 2024.

“Heavy reliance on key trade partners like the US, China, and the EU heightens concerns for Asean trade.

“Additionally, the major elections in significant trading partners this year, including the US, South Korea, and India, introduce further complexity, potentially shaping international trade dynamics,” it said in a note.

The investment bank stated that the escalation of the Red Sea crisis posed a significant threat, potentially disrupting global supply chains and elevating business costs.

Despite these risks, an anticipated uptick in electronics exports and favourable base effects could partially offset negative impacts.

As such, PIVB forecasted that Malaysia’s exports of goods and services will rebound with a growth rate of 5.4% in 2024.

Yesterday, the investment, trade and industry ministry (Miti) said Malaysia’s total trade in January 2024 rebounded at a double-digit rate of 13.3% to RM234.73 billion year-on-year after registering 10 consecutive months of contraction.

The ministry said exports edged up by 8.7% to RM122.43 billion and imports rose by 18.8% to RM112.3 billion.

“This was also the highest monthly value recorded for January,” Miti stated.