Published on 25 Jun 2021.
Malaysia’s export growth should help offset some of the expected weakness in its economic recovery in 2021. Exports have rebounded to pre-pandemic levels and are estimated to have surged 64.5% y-o-y in May 2021 - the ninth consecutive month of expansion since September 2020. Buoyed by strong demand for electrical and electronic (E&E) goods and rubber gloves since June 2020, the momentum is expected to remain supported by a global recovery and a semiconductor super cycle this year.
Given the ongoing global chip shortage and consistently robust demand for E&E products, firms will likely build capacity hence further improving the growth potential of this sector. The strong interest in the Malaysian E&E sector translated into RM47.0 bil of approved investments in 1Q 2021 – three times that of the entire 2020.
In the coming months, growth rates of more than 50% are likely to be unsustainable due to dissipating low-base effects. However, we believe the global recovery will sustain this positive trend, with nominal export growth reaching 10%-15% in 2021.
Nur Nadia Mazlan
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