HSBC: Malaysia to sustain growth in electrical and electronics shipments
23 Apr 2021
KUALA LUMPUR (April 23): Malaysia will likely sustain growth in shipments of electrical and electronics goods, driven in part by the country’s large automotive chip industry, said HSBC Global Research.
In a note today, the research house said despite a drop in foreign direct investment (FDI) inflows in 2020, manufacturing investment approvals expanded last year on top of a high base.
“Hence, Malaysia is gaining fresh FDI in higher value-added chip production,” it said, adding that palm oil and liquefied natural gas export volumes were likely to pick up as supply increases.
Nevertheless, the research house expects policymakers and residents to remain cautious while weighing on economic recovery with Malaysia’s credible vaccination plan.
“Vaccine deliveries are due to accelerate meaningfully in June, which should put the country on track to fully vaccinate at least half of the population by year-end.
“This is quicker than most regional economies, but it will not prevent a deterioration of the situation in the short term,” it said.
On policy, it pointed out that the country’s fiscal stance for 2021 was expansionary.
“Investors will, however, focus on fiscal consolidation plans next year even if the upcoming general election, which is expected to be held as soon as Covid-19 risks subside, could complicate matters,” it noted.