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Kuala Lumpur: Economists have foreseen Malaysia's export growth slowing down this year amid ongoing trade tensions.
MIDF Research said in a note on Tuesday that it forecasts Malaysia's export growth to moderate to 2 percent from 5.7 percent last year, reflecting a more cautious outlook amid ongoing trade tensions.
"Companies are likely to scale back production in anticipation of weaker demand. In the near term, exports are expected to grow over the next two to three months, supported by front-loading activities during the 90-day tariff pause," said the research house.
It noted Malaysia's negotiations with the U.S. administration also currently remain uncertain.
"While the tariff pause provides short-term relief, persistent trade tensions and potential weaker demand from key partners following the looming reciprocal tariffs continue to pose risks to Malaysia's trade outlook," it added.
Malaysia's Ministry of Investment, Trade and Industry announced Tuesday that the country's exports expanded by 16.4 percent year-on-year to 133.56 billion ringgit (31.15 billion U.S. dollars) in April.
As for the period January to April, exports rose by 7.3 percent to 511.92 billion ringgit.
CIMB Securities said in a note on Wednesday that although Malaysia's trade rebounded in April, the upswing was largely supported by the 90-day tariff pause, which triggered a front-loading frenzy as exporters rushed to ship goods ahead of any potential reinstatement of tariffs or breakdown in talks.
"Nevertheless, the trade outlook remains fragile and highly sensitive to policy shifts, with heightened downside risks stemming from persistent global trade tensions and the potential re-escalation of protectionist measures," said the research house, while reiterating Malaysia's 2025 gross domestic product growth forecast of 4 percent.
CGS International also said in a note on Tuesday that it expects Malaysia's exports to potentially slow in the second half of the year, amid weaker international trade conditions after the U.S.'s 90-day tariff pause.
Nevertheless, the research house expects electrical and electronic products and palm oil to support Malaysia's exports this year. (1 ringgit equals 0.23 U.S. dollar).
