Economists see global economic downturn to impact Malaysia’s 2023 external trade

Malaysian economists have said that a global economic downturn is expected to drag Malaysia’s 2023 external trade.

Maybank Investment Bank said in a note that it forecasts slower 2023 exports and imports growth of 4 percent and 6 percent respectively for Malaysia as it expects global real gross domestic product growth to slump this year amid stagnation or recession in major advanced economies.

“Keeping this year’s external trade in the slow growth territory is the expected firmer growth of China, which is expected to benefit bilateral trade, as well as the mixed outlook for the average prices of major export commodities,” said the research house.

Meanwhile, UOB Global Economics and Market Research said in a note that it expects Malaysia’s export growth to dip significantly to 1.5 percent from a double-digit growth of 25 percent in 2022.

It mainly takes into consideration the statistical base effects (after two consecutive years of robust gain in 2021-2022), softening global demand, ongoing global tech down cycle, exporters’ capacity in meeting environmental, social, and governance market demand, and expectations for lower export earnings in light of stabilizing commodity prices.

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