MIDF Research: Malaysia's external trade to expand steadily beyond 2023 with new free trade agreements

• Published date: 02 February 2023
• Publication title: Malay Mail Online

MIDF Research expects Malaysia's external trade activities to expand steadily beyond 2023 amid the impacts of new trade agreements, apart from elevated commodity prices and lower monetary rates.

In a note today, it said the Regional Comprehensive Economic Partnership (RCEP) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CTPPP) were also expected to alleviate the external trade performances in 2024.

'In the post-pandemic era, Malaysia has ratified the RCEP and CPTPP, which came into force on March 18, 2022, and November 29, 2022, respectively.

'As of 2022, RCEP members contributed 58.1 per cent of Malaysia's total trade while CPTPP members sponsored 27.5 per cent,' it said.

Having these two free trade agreements (FTAs), the research house said Malaysian products are able to penetrate into wider markets and enjoy cheaper imported goods, hence Malaysia's exports and imports growth rates would touch +12.1 per cent and +10.9 per cent respectively in 2024.

Besides that, MIDF Research also viewed that the external front is still on a challenging path, with concerns of a global economic slowdown, inflation bite, tightening monetary policy in many countries and geopolitical risks in Europe and Asia.

'We foresee slight moderation in exports growth forecast from +25 per cent year-on-year (y-o-y) in 2022 to +9.2 per cent y-o-y in 2023.

'On the bright side, China's reopening provides a silver lining for global trade flows. Malaysia's exports market...