Gross exports seen to grow 2.7% in 2021

GROSS exports are expected to rebound by 2.7% in 2021, benefitting from the recovery in global trade and supply chains, said the Ministry of Finance (MoF).

Exports of manufactured goods are anticipated to turnaround by 2.5%, supported by improved demand for electrical and electronics (E&E) and non-E&E products, it said.

“Higher demand for semiconductor, telecommunication equipment parts, as well as automatic data processing equipment, in line with the global digital transformation and 5G roll-out is expected to expand the exports of E&E by 3%.

“Similarly, exports of non-E&E are expected to improve by 2.1%, contributed by higher demand for chemicals and chemical products, rubber products and manufactures of metal,” the MoF said in its Economic Outlook 2021 report released today.

Additionally, exports of agriculture goods are projected to expand by 4.4% in 2021, led by an increase in demand for palm oil and palm oil-based agriculture products as well as natural rubber.

“In line with the recovery in world economic activities and improvement in crude oil price, export earnings from mining goods are projected to recover by 2.1%, contributed by higher demand from major markets for crude petroleum (2%) and liquefied natural gas (2.2%),” it said.

In 2020, gross exports are projected to decline by 5.2%, weighed down by global supply disruptions as a result of the unprecedented crisis.

Consequently, exports of manufactured goods are estimated to contract by 3.8% following lower demand for E&E and non-E&E products, which are expected to fall by 3.8% and 3.7% respectively.

Nonetheless, exports of agriculture goods are anticipated to rise by 0.7%, buoyed by palm oil and palm oil-based agriculture products. Exports of palm oil are projected to increase by 5.6% with higher demand, particularly from China, India and the Netherlands.

Meanwhile, gross imports are expected to turnaround by 5.3% in 2021, supported by an increase in all types of imports.

“Imports of intermediate goods are projected to rise by 5.2%, mainly attributed to expansion in the manufacturing and construction sectors.

“Similarly, imports of capital goods are projected to expand by 14.3%, following improvement in investment activities and the continuation of strategic projects,” said the ministry.

Furthermore, imports of consumption goods are expected to increase by 3%, led by higher demand from households as consumers’ confidence improves and income increases. – Nov 6, 2020

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