Malaysia’s strong trade growth is set to continue for the remainder of this year, after growing at the fastest pace in 21 months last month, according to economists.

Trade in the country grew by 18.3% year-on-year in July, predominantly due to an increasing number of shipments to advanced economies.

Indeed, according to a statement by the Investment, Trade and Industry Ministry on Tuesday, the trade value hit RM255.88 billion.

Furthermore, Malaysia’s exports continued to increase for the fourth straight month, a rise by 12.3% year-on-year to RM131.15 billion in July. Imports also rose by 25.4% to RM124.73 billion. 

In addition, between January and July this year, Malaysia’s trade grew 9.8% to RM1.652 trillion compared to the same time last year, Business Times reports.

Bank Muamalat Malaysia Bhd's chief economist, Dr Mohd Afzanizam Abdul Rashid stated that the rising demand for semiconductor-related products is expected to bolster Malaysia's export performance in the second half of the year.

That said, he voiced concerns that the slower economic growth in major economies such as China and the US could threaten the sustainability of this positive trend.

“Therefore, while the export outlook remains favourable, the stability of this positive trend will heavily depend on global economic conditions,” he stated.

Whereas Malaysia’s trade performance will continue to show positive growth over the next few months, albeit at a slower pace than in July, according to Tradeview Capital fund manager, Neoh Jia Man.

“The year-over-year growth figure for July 2024 is somewhat skewed due to the inclusion of two extra working days.

“The double-digit growth in exports (+12.3%) was primarily driven by commodities like petroleum products and palm oil, which can be volatile,” he said.

Furthermore, the ministry stated that the robust growth in Q2 has put the country in a favourable position to meet Bank Negara Malaysia's forecast GDP growth of 4% - 5% for the year.

Malaysia achieved strong GDP growth of 5.9% in the second quarter, which is set to boost investor confidence and generate additional trade opportunities.