Exports to continue growing although at slower pace

Stronger ringgit: Lee says the ringgit could end on a stronger note by the end of the year in anticipation of a change in monetary policies

PETALING JAYA: Malaysia’s exports will continue to grow this year, although at a slower pace following blistering performance in 2017.

Socio-Economic Research Centre (SERC) executive director Lee Heng Guie expects the country’s total exports to grow by 7.5% this year, as compared to the forecast 19.8% expansion last year.

Despite the projected slower pace of exports growth, Lee described it as a “credible” pace.

“We must understand that Malaysia’s exports for this year will be growing from a high base in 2017. So, technically, the country will see a lower exports growth this year.

“Apart from that, the strengthening of the ringgit will contribute to a moderate pace of annual export growth, as our local products will be more expensive abroad,” Lee said after SERC’s quarterly economic outlook briefing.

“That said, firmer global growth, coupled with positive leads of the global semiconductor industry, will keep Malaysia’s exports this year in positive trajectory,” he added.

SERC expects Malaysia’s gross domestic product to moderate to 5.1% this year, with domestic demand leading the expansion of economic activities.

As for 2017, SERC expects an economic growth of 5.8% to 6%, the strongest since 2014.

It forecasts the ringgit to continue strengthening, hitting the range of 3.80 to 3.90 against the US dollar by the end of 2018.

Headline inflation-wise, Lee said inflationary pressures would remain elevated in 2018 despite the expectation of a lower inflation rate this year.

SERC opined that headline inflation for 2018 would moderate between 3% and 3.5%, as compared to the forecast 3.9% last year.