RHB Bank cautious about Malaysia's export outlook despite April surge
KUALA LUMPUR: RHB Bank Bhd has maintained a cautious outlook on Malaysia's export performance despite a surge in April exports, citing persistent global uncertainties and potential risks from United States (US) tariff policy developments.
In its latest Global Economics and Market Strategy report, RHB Bank economist Chin Yee Sian said Malaysia's April exports rose by 16.4 per cent year-on-year (y-o-y) - significantly higher than the 7.5 per cent market consensus and its 10.3 per cent projection - but the momentum may not sustain.
"Despite recent positive developments in the de-escalation of trade tensions, driven by progress in US-China talks, we urge caution against premature optimism.
"In the near term, exports - especially to the US - may receive a temporary boost from front-loading during the 90-day US tariff pause, but lingering uncertainty and potentially weaker global demand may continue to weigh on Malaysia's trade performance in the months ahead,' she said.
Chin said the tariff suspension is scheduled to expire on July 8, and there is no clear indication whether the exemption will be extended to other economies beyond China and the United Kingdom.
"Further uncertainties remain, especially if US President Donald Trump raises universal tariffs to 20 per cent (up from the current 10 per cent).
"Additionally, proposed US tariffs on Chinese imports stand at 30 per cent, still short of the 60 per cent target Trump highlighted as a key pillar of his 2024 re-election campaign,' Chin said.
She said the 10 per cent US tariff on Malaysian goods - potentially rising to 24 per cent after the 90-day suspension - positions Malaysia as a direct target of US tariff policy.
"Additionally, potentially slower growth in major economies and lingering uncertainties over tariff tensions, especially after the 90-day pause period, pose significant downside risks to Malaysia's trade and economic outlook, prompting a more cautious stance,' she said.
She added that export-oriented sectors reliant on demand from the US and China, such as electrical and electronic products, crude materials, and machinery, are likely to be hit the hardest by direct US tariffs and broader trade tensions.
Despite the external uncertainties, she said Malaysia's efforts to diversify export markets and strengthen trade pacts such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) are strategic steps to reduce reliance on any single market and boost regional cooperation.
"Additionally, Malaysia's neutral stance in trade and geopolitical matters allows it to avoid being directly impacted by conflicts between major economies, positioning the country to benefit from diversified trade relationships.
"These factors help insulate Malaysia from the full impact of global trade tensions and tariff policies, fostering a more resilient economic outlook,' she said.
CPTPP and RCEP are multilateral trade agreements aimed at reducing tariffs, enhancing market access, and strengthening economic integration among member countries across Asia-Pacific. - Bernama
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