The research bank has maintained its view that there is potential for export data to turn positive by the first quarter of 2024 (Q1 2024).

Similarly, the rising trend of capital and intermediate goods imports also signalled the potential expansion in manufacturing activities in the upcoming months, it said in a note today.

RHB IB said more evidence of improvement in trade activities by regional economies was seen in recent months.

“Further out, the global growth is envisaged to accelerate in 2024 as rate normalisation may materialise in H2 2024 with Federal Funds Rate peak in Q1 2024, inflation risks may dissipate over the same period, and China’s economy may recover by 2024,” it said.

The research bank said the return of China’s growth in 2024 would also help Malaysia’s trade, investments, and tourism arrivals in the coming year.

“As China is one of Malaysia’s primary trade partners (with exports to China accounting for 13% of Malaysia’s total exports), higher demand from China would strengthen the external demand in the upcoming months,” it noted.

Meanwhile, the research bank said the goods surplus is expected to trend higher on the back of higher exports, in line with its rosier global and regional economic outlook for 2024.

“Our 2024 current account balance forecast is projected at 3% of gross domestic product, higher than 2.1% of GDP estimated for 2023.

“In tandem with the rebound in the global technology cycle, Malaysia’s exports would be supported by expansion in electrical and electronic exports,” it added.