Moody’s: December trade data provides optimism for manufacturing-led rebound in 2021
01 Feb 2021
KUALA LUMPUR: The December trade report provides some optimism for a manufacturing-led rebound in 2021, even as Malaysia continues to battle a second wave of the virus, Moody’s Investors Service said.
The ratings agency said the data provided optimism that external demand would cushion the downturn in the first quarter of 2021.
“However, (it) much depends on external conditions, which are currently unstable.
“Lockdowns in Europe and the United States are still in place even as countries race to roll out vaccines, while within Asia, parts of China, Thailand, South Korea and Japan have reinstated restrictions,“ it said in a statement.
Malaysia’s trade balance rose to RM20.7 billion in December 2020, up from RM16.8 billion in November 2020.
Exports rose by 10.8 per cent year-on-year, caused by a 47.1 per cent surge in agriculture and a 12.4 per cent increase in manufacturing.
“Encouragingly, imports increased for the first time in nine months despite the strict movement control measures imposed on almost all states,“ it said.
Moody’s said although the Asia-Pacific region managed to subdue its first wave of the virus relatively quickly thanks to strict lockdowns, it appears that widespread vaccine distribution is necessary for a sustained rebound in the region.
The ratings firm recently (Jan 28) affirmed Malaysia’s local and foreign currency long-term issuer and local currency senior unsecured debt ratings at A3 with a stable outlook.
It said the rating affirmation is underpinned by its expectation that Malaysia’s medium-term growth prospects would remain strong, and the country’s macroeconomic policymaking institutions would continue to be credible and effective, providing resilience to the sovereign credit profile.