April's double digit growth in exports on a year-on-year basis, supported by growth in commodity exports, may be the beginning of a trend going forward.
Economists expect that higher commodity prices would continue to support exports over the remainder of the year despite external headwinds from the United States, China and the euro zone.
They said higher commodity prices would help boost exports going forward as demand for electrical and electronic (E&E) products slowed down.
MIDF Research chief economist Anthony Dass said that based on the current trend, exports growth would be supported by the lessening of the high-base effect of last year and higher commodity prices.
He told StarBiz that the second-half of the year would also make the outlook clearer on the US economy, where unemployment had risen again, triggering fears of slower economic growth.
However, Dass said the US economy was on an uptrend, predicting gross domestic product (GDP) to grow between 2.8% and 3.2%.
“Exports will be supported as long as US GDP grow by 2.8%,” he said, adding that data showed the US was spending more on food (due to higher commodity prices) then on electrical and electronic (E&E) products.
Dass said increased exports to the US would also help to offset China's slower growth brought on by tightening monetary measures.
Last Friday, the Statistics Department released April's external trade data, which showed exports grew 11.1% year-on-year, which was marginally lower than the 11.3% median in a Bloomberg survey.
March's revised external trade data showed exports grew 7.8%. The growth in exports was attributed to commodities such as liquefied natural gas, palm oil and refined petroleum products.
Although month-on-month exports still showed up as negative, TA Securities Holdings Bhd economist Patricia Oh said exports were still at a record high in ringgit terms, which had been the case since the beginning of the year.
“I'm cautiously optimistic considering the uncertainties prevailing in the global economy although I feel that a stronger ringgit may be a drag on E&E exports,” she said.
Oh pointed out that while higher crude oil prices would benefit net exporters of oil, including Malaysia, the E&E industry would suffer as costs went up.