RHB Investment Bank Bhd economist Ahmad Nazmi Idrus said the latest figures might appear that trade could have reached its bottom and is ready for a rebound.
He said the support came from better palm oil prices in recent months and demand from non-electrical and electronics, as well as non-commodity products as reflected in the December 2019 manufacturing purchasing managers’ index (PMI) data.
"Looking ahead, we expect export growth to remain around 1.5 per cent for 2020, with possible upside revision if the pattern of recovery continues," he said in a note on Tuesday (Feb 4).
However, the investment bank is still wary of certain weaknesses, especially with the expectations of modest growth in China and the United States.
Malaysia's total trade recorded positive growth in December 2019 at 1.9% yoy, ending a six-month contraction streak as both export and import grew.
Export in December 2019 expanded by 2.7% yoy after four consecutive months of negative growth, while import increased tepidly by 0.9% yoy, following two months of decline.
For the full year of 2019, total trade fell by 2.5% yoy, while export declined by 1.7% yoy.
"For 2020, we forecast export growth to recover slightly by 1.5 per cent yoy," MIDF Research said in its Economic Review.
It said commodity-based sectors, particularly liquefied natural gas exports, was expected to perform well, especially with the Petronas Floating LNG Facility 2 expected to be operational this year.
The research firm also said the uncertainties over trade war and loss of growth momentum in some major economies would continue to affect exports performance, with another potential risk factor being the Wuhan 2019 novel coronavirus outbreak.
Meanwhile, JP Morgan economist Nur Raisah Rasid said the potential macro impact from the coronavirus outbreak would open room for policy easing in the second quarter of this year.
"While we had expected Bank Negara Malaysia to remain on hold through 2020 and adopt a data-dependent stance, following last month’s policy easing action; the macroeconomic fallout from the current coronavirus outbreak raises the bias for policy easing.
"Thus, we now expect a 25 basis points policy easing in the second quarter to address the potential growth impact from the current coronavirus outbreak," she said in a research note.