The rise in Malaysia’s exports in November by 3.3 per cent from a dismal performance in the previous month is a signal that the worst may be over, says RAM Holdings Bhd Group Chief Economist Dr Yeah Kim Leng. He said the export figure has surprised many economists and has given Malaysia the boost it needed to recover from a 3.2 per cent slump in October last year.
“Demand from the United States and China has continued to contribute to the figure besides the year-end pick-up in demand from other major trading partners,” he told Bernama when contacted. The Ministry of International Trade and Industry (MITI) said on Wednesday that Malaysia’s total trade in November rose 3.7 per cent to RM108.06 billion.Yeah said exports account for roughly 60 per cent of Malaysia’s gross domestic product, making the country vulnerable to downturns in major economies.
He said despite the demand from European Union countries continuing to remain weak, trade between Malaysia and the US and China are the key to success. “Overall, we are still optimistic that Malaysia will be able to achieve gross domestic product (GDP) growth of five to six per cent this year,” he said. He also lauded the current government policies, saying they continue t sustain investors’ confidence, resulting in rising foreign direct investment “But we must remember, we still have to go through the election cliff and once it is over, I believe we will be able to continue growing positively,” he said.
However, Alliance Research economist Manokaran Mottain said Malaysia’s gross exports rebounded by 3.3 per cent in November 2012, reflecting the recovery in demand from China and India. He said Malaysia’s export data for November came higher than the consensus estimate of 2.3 to 2.5 per cent.
“Nonetheless, we remain wary of a sustainable trend in the short term but in moving forward, we expect the volatility to likely remain, although global uncertainty may have subsided greatly, in line with the improvement in global Purchasing Managers’ Index (PMI),” he said in a research note.