KUALA LUMPUR, June 30 -- Malaysia's export performance could improve moving forward, with support coming from the modest recovery in semiconductors at the same time, says AmBank Research.
In a note today, it said this optimistic view partly follows the government's decision to allow more industries to resume operations with some at full operating capacity since May 4, 2020.
This, it noted, is reflected in the improvement in May’s Manufacturing Purchasing Managers’ Index (PMI) which acts as an early indication that the economic downturn caused by the Covid-19 pandemic could start to bottom out.
The headline IHS Markit Malaysia Manufacturing Purchasing Managers’ Index (PMI) rose sharply to 45.6 in May 2020 from the record low of 31.3 in the April 2020 survey.
Companies in other countries are also ramping up their business operations amid the on-going COVID-19 pandemic.
Malaysia's trade surplus rebounded in May to RM10.4 billion, a 14.7 per cent improvement year-on-year thanks to a larger drop in imports as against exports, a significant turnaround against a brief deficit of RM3.4 billion in April.
The trade surplus in May was the highest monthly recorded since May 2008, which also marked the fourth time that the country achieved a trade surplus above RM10 billion this year.
Meanwhile, Kenanga Research said it is maintaining its exports forecast for 2020 at -15.0 per cent to -10.0 per cent against -1.7 per cent on the back of persisting weakness in foreign demand.
"While the degree of decline in exports is expected to soften in line with the ongoing economic reopening, the broad weakness in external demand will remain, with further downside risks emanating from the simmering geopolitical tension among major economies (for example US-China and US-European Union) and the resurgence of COVID-19 cases in major export destinations," Kenanga said.
It also said even though sluggish private investment and consumption activities amid surging unemployment would further weigh on the economy, it believes the impact of the gradual easing of movement restrictions and the reopening of the economy is still at an early stage.
Kenanga is maintaining its 2020 gross domestic product (GDP) growth forecast at -2.9 per cent (2019: 4.3 per cent).
Separately, Maybank IB Research said due to the slow and fragile global economic recovery, it has made no changes for Malaysia's full-year exports (-8.8 per cent), imports (-9.5 per cent) and trade surplus (RM131 billion) forecasts respectively.
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