They said strong consumption and investment activities are likely to drive imports.

Nonetheless, the pace of increase in imports remains ahead of exports for now.

Kenanga Research said in a note today that Malaysia’s gross domestic product (GDP) growth is still susceptible to downside risks.

“We maintain growth for the second quarter of 2022 (Q2 2022) at 7.7% (Q1 2022: 5%), supporting the overall 2022 GDP growth forecast at 5% to 5.5% (2021: 3.1%),” it said.

Malaysia’s exports expanded by 30% year-on-year in Q2 2022 (Q1 2021: 22%), with a year-to-date expansion of 26.1% over the last six months, mainly through Malaysia’s export diversification led by the electrical and electronics (E&E) sector and elevated commodity prices.

Trade surplus stood at RM21.9 billion in June 2022 (May: RM12.7 billion), as exports rebounded sharply month-on-month at 21.3% far exceeding imports at 15.2%.

“Besides, we believe the surge in trade performance was also contributed by the weak ringgit and partly due to improvements in the global supply chain as China gradually reopened its economic activities,” Kenanga added.

CGS-CIMB Research said it has maintained its current account surplus forecast for 2022 at 1.7% of GDP.

It added that the international border reopening from April 1, 2022, and the subsequent arrival of foreign tourists could offset the weakened trade balance given that there are more inflows into the services account.