Malaysia's trade outlook positive, exports to rebound by 4.3% in 2024 - RHB IB

KUALA LUMPUR: RHB Investment Bank Bhd (RHB IB) maintained its sanguine view of Malaysia’s trade outlook for 2024, with exports to rebound by 4.3 per cent year-on-year in 2024 from a decline of 8.0 per cent in 2023.

The research house said in a note today that the export momentum is anticipated to pick up in the first half of this year (1H2024).

"The view is founded on three key catalysts, namely a rosier global and regional economic outlook, more positive economic dynamics of China, and the re-acceleration in the global technology cycle,” it said.

The rising trend of capital and intermediate goods also signalled the potential expansion in manufacturing activities in the near term and improvement in investment in investment appetite.

"Global growth is envisaged to accelerate in 2024 amid a pause in global interest rate hikes with rate normalisation anticipated by 2H2024, inflation risks to dissipate over the same period and China’s economic recovery by 2024.

RHB also maintained its above-consensus forecast for the United States and China economies, where their gross domestic product (GDP) is anticipated to expand by 2.2 per cent and 5.0 per cent, respectively, in 2024.

For ASEAN economies, the RHB leading indices suggest that GDP growth momentum will accelerate into 1Q 2024 and be sustained for 1H2024 on the back of a rosier global growth backdrop.

"The possibility of rate cuts and easing monetary conditions by 2H2024 would further support the global economic conditions.

"Higher import demand from China is anticipated as the economic momentum in China has begun to gather steam,” it added.

RHB highlighted that Malaysia would be at the forefront to benefit from the recovery in China’s economy as key export products, including electrical and electronic, machinery and transport equipment, and other manufactured goods, command the lion’s share of trade in China’s import demand. - Bernama