Malaysia exports to rebound on China’s strong industrial numbers

The strong industrial output numbers coming out of China will be good for Malaysia.

A local research house was optimistic Malaysia’s exports will rebound with a growth rate of 5.2% year-on-year (YoY) in 2024 compared to a contraction of 8.0% in 2023, underpinned by better growth in China, improving global business optimism and supportive commodity prices.

“Moving forward, the better-than-expected industrial output and retail sales growth rates indicated further improvement in China’s economic recovery pace,” according to an economic brief released by MIDF Research today.

It was commenting on China’s industrial output which grew 7.0% YoY in the January-February period, according to data shown on Monday.

The growth accelerated from the 6.8% pace seen in December and beat expectations, marking a solid start for 2024 and offering tentative relief to policymakers, according to another report.

In its report, MIDF Research noted that China’s industrial production growth of 7.0% YoY in January-February 2024 was the fastest expansion since February 2022 and exceeded market expectations of 5.0% YoY growth.

It said manufacturing output continued to register strong growth of 7.7% YoY (December 2023: +7.1% YoY) while mining output growth moderated to 2.3% YoY (December 2023: +4.7% YoY).

In a statement in January, Malaysia’s Ministry of Investment, Trade and Industry said Malaysia’s trade fell 7.3% to RM2.637 trillion in 2023 dragged by slower global demand, lower commodity prices, geopolitical uncertainties, high inflation rate, downcycle in the semiconductor sector.

It said exports contracted by 8% to RM1.426 trillion for the year, while imports weakened by 6.4% to RM1.212 trillion compared with 2022.

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