KUALA LUMPUR: The trade outlook continues to be optimistic for Malaysia despite the ongoing US-China trade war, said Malaysia External Trade Development Corp (Matrade) chief executive officer Datuk Wan Latiff Wan Musa.
“We are confident that exports this year would go beyond RM1 trillion as last year it was RM998bil and so far in the first five months exports grew by 0.3% and we only needed a 0.2% (growth) to reach RM1 trillion. So, basically we have already hit our target and in the next six months, looking at the trends from statistics of foreign direct investments and the purchasing managers index we are confident that exports will increase in the second half as well,” he said at a press conference after the unveiling of a Sage survey on domestic businesses.
He also noted that exports are always usually better in the second half of the year compared with the first half noting that September and October are usually very good months for exports out of Malaysia.
“The momentum of export growth is on the upward trend. The first quarter GDP grew by 4.7% and this is a good indication that the Malaysian economy would continue to grow because the trade war started in June/July last year and the economy still grew,” Wan Latiff said.
“We have heard of strong exports and foreign direct investments are coming into Malaysia also the recent statistics for the performance for the manufacturing sector: these indicate that the trend would continue and therefore GDP for the second quarter will be on the upward momentum,” he added.
Meanwhile, he also hoped that the United States and China would be able to find middle ground and can resolve their trade disputes eventually.
He was speaking at the unveiling of the Sage survey on domestic businesses that indicated 59% of Malaysian businesses continue to be positive on trade performance moving forward.
“Six out of 10 domestic businesses are positive that trade will increase in the next 12 months. This optimism is driven by healthy prior year performance and profit growth, as well as stronger inter-regional trading prospects,” said Sage Asia’s vice-president and managing director Arlene Wherrett.
Despite the volatility resulting from the recent China-US trade war, the survey results show that Malaysian businesses continue to rely on trading partners such as China (43%), the United States (27%) and Japan (26%).
According to a press release, survey respondents said that in the next 12 months, diversification of markets would be a priority given the current global trade uncertainties, with 68% of local firms reporting that they are keen on exploring markets across Asia.
“After Asia, Malaysian businesses are seeing Australasia as the next most sought-after market (32%), followed by Europe (30%). These findings suggest that efforts to facilitate future development of trade, be it through export promotion programs from the government or government affiliated organisations, as well as inter-region collaboration should focus on these continents,” Wherrett added.
“We urge Malaysian companies to explore the opportunities in non-traditional markets such as in Africa, West Asia and Latin America,” Wan Latiff said.