Malaysia's external trade outlook is still robust this year after total trade surged 29.8 per cent year-on-year (y-o-y) in May, with export growth accelerating to its fastest pace in nearly four years.
MBSB Research has revised Malaysia's external trade higher, with exports expected to grow 14 per cent compared with 6.4 per cent in 2025.
Imports are forecast to expand nine per cent, up from six per cent previously.
MBSB Research said the stronger projection factors in recent trade momentum and higher price effects.
Export growth expected to be supported by continued demand for technology products, electrical and electronics (E&E) components and higher re-exports.
UOB also raised its trade forecast higher, expecting Malaysia's export growth of 25 per cent from 8.6 per cent previously.
This follows a 24.3 per cent year-to-date gain and strong diverted trade flows.
However, the bank said the upgrade comes with caution as domestic exports and re-exports continue to show different trends.
Despite the interim US-Iran peace deal, risks remain as front-loaded orders driven by supply concerns could ease in the coming months, it added.
Lower energy prices following the agreement may also weigh on commodity export earnings, while uncertainty over potential US semiconductor tariffs remains a key wildcard.
The outcome of ongoing US investigations is expected to provide more clarity in the months ahead, UOB said.
The bank said earlier stockpiling and order shifts had supported recent export momentum, but demand could normalise as supply chain concerns ease.
Potential US semiconductor tariffs remain a major risk factor, with policy developments likely to shape Malaysia's trade outlook.
In May, the country's exports jumped 45.3 per cent y-o-y, the strongest growth since August 2022, compared with 37.3 per cent in April.
Imports, meanwhile, expanded at a slower but still healthy pace of 14.1 per cent y-o-y, sustaining double-digit growth for the third consecutive month.
The stronger trade performance was driven largely by the manufacturing sector, where exports surged 51.7 per cent y-o-y.
This was supported by higher shipments of E&E products, petroleum products, and optical and scientific equipment.
Mining exports also gained momentum, rising 36.5 per cent y-o-y, while agriculture exports declined 22.9 per cent during the month.
By destination, exports to the United States jumped 97.7 per cent y-o-y on strong E&E demand.
Shipments to Singapore accelerated 40.4 per cent, while exports to Taiwan remained strong with an 81.8 per cent increase.
Source: nst.com