CIMB expects country's exports, imports to expand by over 5pct

KUALA LUMPUR: CIMB Securities Sdn Bhd expects export growth to continue expanding by 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 5.0 per cent. 

The firm said although 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. 

"For the whole of 2024, Malaysia registered export growth of 5.7 per cent (2023: -8.0 per cent) and import growth of 13.2 per cent (2023: -6.2 per cent), exceeding our forecasts of 5.0 per cent and 12.8 per cent, respectively. 

"The pickup in trade growth in December signals continued strength in manufacturing trade, which may lift Malaysia's overall 4Q24 gross domestic product (GDP) growth, currently estimated at 4.8 per cent year-on-year (YoY). 

"Malaysia's external trade outlook remains supported by the ongoing recovery in global demand amid the tech upcycle and global monetary policy easing that will likely stretch into 2025, despite potential tariff headwinds from US protectionist policies," it said in a note. 

For Dec 2024, Malaysia's exports rebounded to a growth of 16.9 per cent YoY compared to 3.8 per cent in Nov 24, the fastest pace in 27 months, trumping market expectations. 

This was driven by front-loading activities ahead of potential tariffs before Donald Trump's inauguration as the 47th US president on Jan 20, 2025. 

Meanwhile, Hong Leong Investment Bank Bhd (HLIB Research) maintained its 2025 GDP growth forecast at 4.9 per cent YoY. 

The firm said the global trade outlook remains clouded by rising economic uncertainty, particularly in light of possible shifts in trade policy. 

"Nevertheless, Malaysia's export performance is expected to be partly cushioned by its neutral stance, diversified export structure, and potential trade diversions amid a renewed US-China trade war," it noted.

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