AmResearch: Exports to grow 2-2.2% this year

PETALING JAYA: AmBank Research expects Malaysia’s export volume to grow 2% to 2.2% in 2017, from an estimated 0.6% in 2016, despite uncertainties on the external front.
The estimates are still lower than the 3% growth projection by the Ministry of International Trade and Industry.
“This partly explains as to why the Nikkei Manufacturing PMI (purchasing managers’ index) recorded its highest reading in 20 months in January 2017. It signals an overall improvement in operating conditions as the weak ringgit and gradual pickup in global demand kicked in,” the research house said in a report last Friday.
AmBank Research noted that exports remained in the positive growth trajectory in December for the second consecutive month and rose at a double-digit pace.
Exports grew by 10.7% year-on-year (y-o-y) in December, from 7.8% y-o-y in the previous month and in 2016 rose 1.1% y-o-y to RM785.93 billion.
Petroleum products saw a surge in export volume by 69.7% y-o-y, the highest since mid-2016 while liquefied natural gas grew at a faster pace of 14.5% y-o-y.
AmBank Research added that electrical and electronic products, which make up about 36% of total exports, saw export revenue grew 9% y-o-y in December to RM27 billion, from 13.3% y-o-y in November on the back of higher global demand.
The research house reiterated its 2017 gross domestic product growth target of 4.5% from its estimated 4.2% last year.
“Our ringgit against the US dollar projection for the full year of 2017 average would be around 4.48,” it said.
On a separate note, HLIB Research said it believes the current account, after tapering in 2016, would stabilise at around RM15 billion this year. It expects Bank Negara to leave the Overnight Policy Rate unchanged at 3% in 2017 on expectations of stronger growth and higher inflation.