KUALA LUMPUR: Malaysia’s export sector outlook is expected to be positive in 2022, with trade primed to lead the country returning to pre-pandemic growth in the middle of the year, Moody’s Analytics said.
However, it said the Omicron variant and extreme weather may pose a risk to supply chains.
“Vaccinated travel between Singapore and Malaysia has already been paused and the reopening of international travel will most likely be delayed,” it said in its Asia-Pacific economic preview report for Jan 3 to 7.
Moody’s said although widespread lockdowns were unlikely, much would depend on the efficacy of the vaccines against the new variant.
Malaysia’s November trade figures were on the upside, with exports soaring 32.4% year-on-year, following a 25.5% increase in October.
The trade balance, however, narrowed to RM18.9 billion in November from October’s record of RM26.2 billion, mainly due to a 38% yearly increase in imports as domestic conditions improved amid the easing of Covid-19 restrictions.
Growth was driven by exports of electronics and petroleum products.
“Exports of electronics and related goods remained robust, as the global shortage of semiconductors continued to power demand.
“The chip shortage is expected to extend in 2022, supporting Malaysia’s manufacturing sector,” it said.
The rating agency also said Malaysia’s crude oil exports were likely to be choppy in the coming months as the global economy had to contend with increased travel restrictions due to Omicron and Organisation of the Petroleum Exporting Countries+ (Opec+) production target negotiations.
Palm oil saw exports jump 90% on a yearly basis, driven by an increase in value and volume.
“However, flash floods in December 2021 and a migrant worker shortage will likely curtail supply in the coming months,” it said. “China, palm oil’s main consumer, is also facing factory shutdowns in key cities as it pursues its strict zero-Covid policy.” - FMT
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