KENANGA MAINTAINS 2024 EXPORT GROWTH FORECAST AT 7.3 PCT DESPITE RISING DOWNSIDE RISKS

KUALA LUMPUR, Sept 20 (Bernama) -- Kenanga Investment Bank Bhd has maintained a positive outlook for exports, projecting a growth rate of 7.3 per cent for the year based on current indicators.

The bank highlighted that while export growth has reached 6.0 per cent for the first eight months of 2024 year-on-year (yoy), up from 5.1 per cent in the seven months, it is still below the full-year target.

“Despite positive momentum, downside risks to export growth are rising. These include a potential US economic slowdown and a weaker-than-expected recovery in China.

“Notably, exports to China have dropped 2.0 per cent year-to-date, but this was partly offset by strong US demand, which surged 18.8 per cent over the same period,” it said in its latest Economic Viewpoint.

Kenanga Investment said a significant weakening in the US economy could threaten Malaysia’s export outlook.

“Additionally, as imports continue to grow faster than exports, we expect a narrowing trade surplus in the near term, which could pressure the current account balance,” it noted.

Malaysia’s trade continued its stellar performance in August, growing 18.6 per cent year-on-year to RM252.65 billion, the fastest growth rate in 22 months.

Exports eased slightly to 12.1 per cent in August compared to July’s 12.3 per cent but beat the 11.8 per cent consensus expectations.

Imports also surged to a 22-month high at 26.2 per cent, far exceeding consensus estimate of 21.2 per cent.

Kenanga Investment remains optimistic about Malaysia achieving a gross domestic product (GDP) of 5.0 per cent this year following its strong first-half performance.

Growth is expected to remain resilient for the rest of the year, driven by robust domestic activity and improving external trade, supported partly by a low base effect.

“However, we project growth to moderate to 4.8 per cent in 2025, as global growth, especially in advanced economies, is anticipated to slow,” it noted.

-- BERNAMA