KUALA LUMPUR, April 20 (Xinhua) -- Malaysian economists on Thursday maintained their cautious outlook for Malaysian trade amid potential global recessions, but opined that China's reopening will support its growth.

UOB Global Economics & Market Research said in a note that lingering global recession risks amid a tighter monetary policy environment will continue to suppress global demand this year.

It said that expectations for a tightening of credit conditions following the recent global banking sector turmoil will also further amplify the global recession risk and dent business confidence in the near term.

Thus, it maintained its modest export growth projection for Malaysia of 1.5 percent for this year.

It opined that a stronger-than-expected recovery in China as well as greater market access from the Regional Comprehensive Economic Partnership (RCEP) agreement and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) would give impetus to Malaysia's trade performance in the near term.

Meanwhile, Maybank Investment Bank said in a note that it forecasts slower 2023 exports and imports growth of 4 percent and 6 percent for Malaysia, to reflect its projection of slower global real gross domestic product (GDP) growth forecast.

According to the research house, three months into the year, the external trade performance reflected the headwinds from the economic downturns in the United States and Europe, given the slowdown in exports to the United States and the drop in shipments to the European Union.

However, it expects tailwinds to external trade via exports to China from firmer growth in China on its full economic re-opening to kick in subsequent months.

Affin Hwang Investment Bank said in a note that in the near term, it believes Malaysia's external demand will remain subdued amid the uncertain outlook for the global economy.

Despite the slowing inflationary pressure in most of the advanced economies, the underlying price pressures remain sticky from high commodity prices due to the prolonged geopolitical tension, it said.

It said downside risks to the global economy have also increased due to uncertainties from rising global financial risks.

However, on a positive note, it said the recovery of China's economy may provide support to global trade activities from the perspective of easing supply-chain disruption.

Taking into consideration the downside risks from external factors, particularly concerns of weaker-than-expected export growth, the research house is maintaining its projection that Malaysia's real GDP growth will likely slow to 3.7 percent in 2023 from 8.7 percent in 2022.

Real export growth is projected to slow to 3.5 percent from 12.8 percent in 2022 and real import growth is seen to moderate to 4.4 percent from 14.2 percent.

As for Public Investment Bank, despite the prevailing uncertainties surrounding the macroeconomic environment, China's accelerated growth is poised to catalyze global demand and reverberate positively across other economies.

It also posits that the May Day holiday in China may usher in an influx of Chinese tourists to Malaysia, given that Kuala Lumpur often ranks among the top 10 favorite destinations for Chinese travelers.

However, due to the global economic slowdown, it estimated that Malaysia's real GDP growth will moderate to 3.8 percent in 2023.

"In this context, we maintain our view that real export growth will remain positive, albeit moderating to 3.3 percent year on year in 2023, while real import growth is expected to stand at 4.8 percent year on year in 2023," it said.

Taking into account much higher base effects and lower-than-expected first-quarter performance, MIDF Research also revised down its projection for Malaysia's exports and imports.

The research house predicted Malaysia's export growth to moderate to 6.2 percent and imports to grow at 6.4 percent.

"The downward revision in exports reflects our assumption that the anticipated boost from China's economic reopening will be delayed, but we still expect recovering demand from China to positively impact Malaysia's trade later this year," it said.

In general, it maintained a cautiously optimistic view that trade will continue to grow but the outlook can be constrained by elevated inflation, higher borrowing costs, and factors affecting supply (such as geo-political tension or trade disruptions) that will result in even weaker global demand.

Hong Leong Investment Bank Research also said in a note that on the global front, trade activity is expected to remain subdued as growth remains soft in major economies.

"In tandem with the muted global demand conditions, Malaysia's trade performance is also anticipated to remain modest in coming months, though partly mitigated by China's economic reopening," said the research house.

According to the research house, risks to export growth remain tilted to the downside, stemming from weaker-than-expected external demand and further escalation of geopolitical tensions.

It maintained its 2023 GDP growth forecast for Malaysia at 4 percent year on year.

Meanwhile, in anticipation of slower global trade, Kenanga Research retained Malaysia's 2023 export growth forecast at 5.8 percent.

Despite slightly better-than-expected trade performance in March, it still expects export growth to remain moderate in the coming months, with high probabilities of slipping into contraction due to the normalization of economic activities, relatively lower commodity prices and the waning effect of the lower base recorded last year.

Against this backdrop, it kept Malaysia's first-quarter GDP forecast unchanged at 5.1 percent, with full-year growth estimated at 4.7 percent.

"Though the impact of the global economic slowdown is still uncertain, Kenanga Research expects Malaysia's exports growth to be supported by China's reopening," it said.