KUALA LUMPUR: Malaysia's export growth in November, which beat estimates, was likely due to front-loading of trade activities ahead of expectations of US President-elect Donald Trump's tariffs in 2025.
Malaysia's export growth gained 4.1 per cent year on year (yoy) in November 2024, exceeding CIMB Securities Sdn Bhd's expectation of 3.3 per cent and Bloomberg consensus of 1.9 per cent.
"This is likely driven by front- loading activities in anticipation of potential tariff impacts as US President-elect Donald Trump prepares to assume office in early 2025," the firm said in a note.
CIMB Securities said the global semiconductor recovery is set to sustain Malaysia's export momentum into 2025, with electrical and electronics (E&E) exports expected to accelerate further. "Moreover, uncertainty over post–US election trade policies will likely continue fuelling front-loading activities while the ongoing adoption of the China Plus One strategy bolsters Malaysia's trade prospects," it said.
CIMB Securities said the pick-up in export growth in November signals continued strength in manufacturing trade for the fourth quarter of 2024 (4Q24).
This is despite softer oil prices and maintenance-related shutdowns dampening mining shipments.
Moving forward, CIMB Securities said Malaysia's external trade outlook remains supported by the ongoing recovery in global demand amid the tech upcycle and easing monetary policies in the second half of 2024 (2H24), despite potential tariff headwinds from US protectionist policies.
The firm forecasts export growth to expand 5.3 per cent in 2025, alongside a projected 5.6 per cent rise in imports in tandem with gross domestic product (GDP) growth of 5 per cent.
"Although lingering trade and political uncertainties pose downside risks, Malaysia's strategic location, advanced trade infrastructure, and proactive policy measures position it well to capitalise on opportunities in the shifting global trade environment," it added. Ends