Malaysia's export still at risk amid 3% growth forecast

Analyst predicts more pronounced pick-up can be seen in March.

According to DBS, Malaysia's headline export growth is expected to register 3.0% YoY, up from the drop of 5.8% previously. Import growth will also pick up to 4.8%,from -6.5%. This will thus translate into a trade balance of MYR 8.2bn forthe month. 

DBS, however, adds that there could be downside risk on Jan-Feb export and industrial production data due to the Lunar New Year effect.

"Production and export activities may slow during the festive period due to the lesser number of working days in the month plus workers going on vacation leave. So even if the figures today come in poorerthan expected, one should look beyond thistransient festive season effect. With the global outlook normalising, a more pronounced pick-up can be expected from March onwards."

Here's more:

Separately, industrial production will likely record a healthy 5.6% on both external and domestic catalysts. As it is, global outlook hasimproved. Economic data from Asia and the developed economies are reflecting a gradual normalisation process.

The PMIs of key export market have been grinding north while global electronics demand is also recovering. These make for better export and manufacturing performance.

In addition, the domestic sector, led by the strong investment growth will also provide an impetusto better industrial production.

Overall, while domestic growth will remain a key driver of growth,the external improvement will deliver the extra boost.