KUALA LUMPUR, July 21 (Xinhua) -- Economists have foreseen Malaysia's near-term export outlook to be clouded by U.S. tariff uncertainties, despite the country's exports growing by 3.8 percent year-on-year in the first half.
UOB Global Economics and Markets Research said in a note last Friday that Malaysia's near-term export outlook remains clouded by ongoing global trade and tariff policy uncertainties, geopolitical risks, and evolving domestic policy reforms.
"The fourth month of contraction in imports of intermediate goods and sluggish business sentiment also presage weaker manufacturing and export activities in the foreseeable future," said the research house.
In the meantime, it maintained Malaysia's 2025 full-year export growth forecast at 3.8 percent while closely monitoring external developments, particularly U.S. tariffs and potential retaliation from major economies.
MBSB Research also said in a note that it forecasts Malaysia's export growth to moderate to 2 percent in 2025, reflecting a more cautious outlook amid ongoing trade uncertainties.
"Ahead of the Aug. 25 tariff deadline, export growth may pick up due to front-loading activities, though the boost could be limited," said the research house.
According to MBSB, Malaysia's 25 percent tariff, while currently under negotiation, is higher than those of Indonesia and Vietnam, posing a risk to Malaysia's export competitiveness to the United States.
It opined that a more favorable outcome from the ongoing trade negotiations could help preserve Malaysia's competitive position.
"Softer demand from key partners, however, continues to pose downside risks to Malaysia's trade outlook, while sustained import growth may narrow the trade balance temporarily in the near term," it said.
In particular, it noted that continued weakness in mining exports will remain a drag to overall exports, in contrast to the increased exports of electrical and electronics (E&E) and palm oil.
"Ongoing efforts to diversify export markets and strengthen bilateral trade ties are expected to cushion tariff impacts on trade with the United States," it said.
"We expect Malaysia's growth will continue to be supported by resilient domestic consumption," it added.
Meanwhile, Maybank Investment Bank said in a note on Monday that Malaysia's latest external trade data showed the crosscurrents of domestic tailwinds -- especially an investment upcycle -- and external headwinds, amid the overhangs in U.S.-Malaysia trade talks and tariffs risks.
"Malaysia's external trade outlook is dependent on the outcome of U.S.-Malaysia trade negotiations ahead of the Aug. 1 deadline, when the country-specific 25 percent reciprocal tariff kicks in, plus the overhangs in product-specific tariffs by the United States, especially on semiconductors," said the research house. ■
