Boston, MA -- (SBWIRE) -- 04/30/2013 -- More Muted Growth In 2013

Since our last quarterly report, and based on recent data releases, we have raised our estimate for Malaysian GDP growth in 2012, but we have simultaneously become marginally less optimistic about the forecast for 2013. We now estimate growth of 4.2% in 2012 (was 3.8%) and forecast growth of 4.5% for 2013 (was 4.6%). In summary, domestic demand was stronger than expected last year, but looking forward we are still concerned about the impact of sluggish exports. After general elections in March, we believe there are increasing risks of a further decline in exports value, which could become a greater drag on growth. There is also evidence that the rebound in household consumption and private sector investment may be too weak to pick up the slack in the economy. In the medium term, we expect Malaysian economic growth to average 4.2% per annum. The real value of foreign trade will grow at an annual average of 3.8% per annum over the same period.

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Headline Industry Data

- The real value of Malaysia's total trade will rise by a predicted 3.7% in 2013, picking up modestly from the estimated 3.4% expansion experienced in 2012.
- Total cargo volume handled at Port Klang will rise by 5.0% to 219.5mn tonnes in 2013, while volume at the Port of Tanjung Pelepas will rise by a slightly lower 4.4% to 144.43mn tonnes.
- Rail freight volume is projected to rise 5.3% to 6.559mn tonnes in 2013 and to average 4.6% annual growth in the five-year period to 2017.
- Air freight volume is set to grow by 4.5% to 8.881mn tonnes in 2013, on a par with the growth rate achieved in 2012.

Key Industry Trends

Future Growth In Intra-Asian Trucking

The intra-Asian trucking market is poised for potentially vast growth, according to Kuwait-based Agility Logistics. The firm's Malaysian and South East Asian chief, Morten Damgaard, stressed that the implementation of more efficient border process and streamlined bureaucracy could easily tap the sector's massive potential.

No Plans To Sell MASkargo For The Moment

Despite a difficult year in 2012 parent company Malaysian Air (MAS) is not planning to sell off its cargo subsidiary, at least in the immediate future, according to chief executive Yunus Idris. 2012 had been 'worse than 2011', Idris said, owing to the problems in the eurozone, higher fuel prices, and the diplomatic standoff between China and Japan. The China market, which at its peak accounted for more than half of MASkargo's revenue, was down by 45% while volumes on the Jakarta-Europe trade lane had fallen by more than 30%, Idris said.

Not A Good Year For The Pirates

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