Malaysia: Export growth still possible next year

Business Times

MALAYSIA'S trade performance for the last quarter of 2008 and next year will depend on major factors including the global economy, commodity prices and exchange rates, said the Minister of International Trade and Industry Tan Sri Muhyiddin Mohd Yassin.

"These are challenging times that require pragmatic and innovative measures. The government will support and facilitate the efforts of the private sector to aggressively seek and pursue opportunities overseas," he said after a briefing on Malaysia's trade performance for September 2008 in Kuala Lumpur yesterday.

Markets in the US, Japan and the EU are expected to remain soft in the near term due to their sluggish economic performance."There are still countries that are expected to register growth and these include the BRIC countries of Brazil, Russia, India and China as well as countries with large reserves such as the oil exporting countries," he added.As a grouping, the BRIC countries account for almost half the world's population and offer vast opportunities for Malaysian exporters.

Muhyiddin said feedback from selected companies and industry associations revealed some differences in expectations on export earnings for the October-December 2008 period and 2009."Given that some industries are still positive about their outlook in the last quarter of 2008 and next year, export growth is still possible in 2009 despite concerns over the global economic scenario," he added.

The electrical and electronics (E&E) sector, which contributes about 40 per cent of the country's total exports, expects to see marginal year-on-year growth in exports in the last quarter of 2008 due to forward orders to meet demand for the year-end holidays.

Companies exporting to the Asian markets expect demand to remain buoyant as the region continues to invest in the industrial sector and stimulate consumer spending."Companies exporting E&E products to the Middle East and Latin America anticipate steady export growth in the fourth quarter of 2008 and full year 2009, to meet demands from the construction and telecommunication sectors and consumers," Muhyiddin said.

Demand for rubber gloves should remain strong as global consumption of gloves is projected to grow further next year to meet health and safety requirements. The industry expects 10-12 per cent demand growth.

Wood products, especially plywood for construction, could see lower demand in developed markets as construction and housing projects are deferred due to the declining housing demand in the US, Japan and Singapore."Furniture and wooden panel sectors are expected to see challenging times ahead as Malaysia's exports face stiff competition from low-cost producing countries in addition to the projected lower retail sales in the US," he said.

- By Rupa Damodaran
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