Malaysia to maintain double-digit trade growth in 2018

by IZZAT RATNA

MALAYSIA will continue to maintain its double-digit trade growth in 2018, backed by the right infrastructure development the government is actively pushing for, aided by local and international partnerships.

Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong said the nation’s total exports grew by 32.5% to RM79.4 billion in May this year against earlier analysts’ predictions of a 23.4% growth, significantly above expectations and the highest for the month in seven years, led by a strong demand for Malaysian manufactured goods, palm oil and crude petroleum.

Data from the Ministry of International Trade and Industry (MITI) noted total trade expanded by 31.5% to RM153.3 billion and imports increased by 30.4%, resulting in a trade surplus of RM5.49 billion.

Demand for exports from the US and China, which are key export trading markets collectively contributing 24% of total exports, has been improving since the secondhalf of the year (2H17), after exports to China posted consecutive negative growth since early 2015, Wee said.

Trade data also showed China, Malaysia’s biggest trading partner, imported the highest number year-on-year (YoY) with a 51% surge in exports due to greater demand for electronics and electrical (E&E) products, petroleum products, chemicals and chemical products, as well as rubber products.

“China’s trade has increased to RM25.21 billion, accounting for 16.4% of total trade and views Malaysia as a major long-term partner. It has the confidence to co-invest here in a huge range of infrastructure projects, which will result in economic rewards in the future,” he said.

“I do not foresee any problem unless there is a sudden drop in performance as we have registered solid performance for 1H17. The booming e-commerce market and Digital Free Trade Zone are the main catalysts boosting trade figures.

“The projected 5% GDP (gross domestic product) growth this year will serve as the driver for trade performance to show consistent growth,” Wee told reporters at CIMB Group Holdings Bhd’s Finance Forum 2017 on Belt and Road Initiatives (BRI) in

Kuala Lumpur (KL) yesterday. Wee said the BRI is expected to foster good government-to-government relationship between Malaysia and China, which would contribute significantly to Malaysia’s overall growth moving forward.

“The influx of Chinese investors is not just in the property sector, therefore, I do not think the recent setback in the Forest City project in Johor would jeopardise other opportunities between Malaysia and China,” he said.

“I do not think any country in the world will allow all their investors to take money out from the country, as there must be certain restrictions over the capital cash outflow to maintain the welfare of the economy. Many other infrastructure projects entering the country from China will also act as a stimulus for the nation,” Wee added.

Among the key infrastructure development projects for Malaysia are Bandar Malaysia, the KL-Singapore high-speed rail and East Coast Rail Link.

On new programmes to assist small and medium enterprise (SME) development, Wee said the government has allocated a total of RM75 million to implement programmes under the SME master plan. The secretariat set up has been actively promoting the new finance to many SMEs and a total of 104 companies have come for pitches in sessions with our 21-member panel and several of them have successfully raised a total of RM185.65 million since 2015,” he added.