Upward revision in global growth a boon for Malaysia's trade - Tengku Zafrul

KUALA LUMPUR - The latest upgrade in global economic growth for this year bodes well for Malaysia and is set to contribute positively to the country’s trade performance, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz.

The World Bank has recently revised upwards the global growth to 2.1 per cent in 2023, stronger than the estimated 1.7 per cent it forecast in January.

Concurrently, it has raised its 2023 growth forecasts for the United States to 1.1 per cent and China to 5.6 per cent, both of which are Malaysia’s largest trading partners.

Malaysia’s gross domestic product (GDP) growth was raised by 0.3 percentage point each over January’s forecast to 4.3 per cent in 2023 and 4.2 per cent in 2024.

Meanwhile, the Organisation for Economic Cooperation and Development (OECD) revised its growth outlook for the world economy to 2.7 per cent from 2.6 per cent, amid easing inflation and the lifting of China’s Covid-19 restrictions, but cautioned of a long road ahead to attain strong growth.

"This upward revision should be positive for countries like Malaysia whereby trade plays a major role in the economy.

"What we've seen is that the growth, trade is still positive, but compared to last year, there is a moderation in growth,” he told Bernama.

Malaysia’s trade stood at about 140 per cent of the country’s GDP, the minister said.

In another development, the World Trade Organisation has forecast a lower trade growth this year at 1.7 per cent compared to 2.7 per cent last year, before picking up to 3.2 per cent in 2024.

Nevertheless, Tengku Zafrul is confident that the volatility in the currency market will not cause a trade deficit in Malaysia.

"I'm not concerned about the trade deficit because we are driven by strong exports coming from the electrical and electronics (E&E) sector, with a contribution to GDP of about six per cent.

"The sector continues to see strong global demand and we stand to benefit from this, and we stand to benefit from the realignment of the supply chain to Malaysia given the global geopolitical scene,” he noted.

Malaysia has maintained a trade surplus since May 2020.

In 2022, Malaysia's total trade surpassed the RM2 trillion mark for the second consecutive year to register RM2.8 trillion. Exports amounted to RM1.6 trillion and imports reached nearly RM1.3 trillion. - BERNAMA