Malaysia's import to decline by 1.1%

But its overall trade outlook still remains positive.

According to DBS, Malaysia's imports are likely to decline by 1.1%, which should thus deliver a better trade surplus of MYR 9.7bn. Similarly, a moderation in the pace of expansion to 6.0% (against 7.5% in Nov12) can be expected for industrial production output. DBS also adds, headline export growth is expected to report an expansion of 1.4% YoY, down from 3.3% in the previous month.

Here's more:

Trade and industrial production data (Dec12) out today will likely confirm that the outlook is improving on the external front. Well, at least that’s what the sequential growth or level term figures should suggest. But headline number in year-on-year will report some moderation in growth pace.

It’s largely base effect leading to the moderation in YoY growth pace. Beyond that, export and industrial output are in fact rising. Such upward trends are likely to continue as global outlook is improving and gradually normalising.

The worst from the European debt crisis is probably behind us. The US recovery, albeit proceeding slowly, remains on track. Asia will provide the heavy lifting this year, led by rebound in China’s investment. Indeed, the PMIs of key export markets have been improving. Industrial and export data for some Northeast Asia economies are also grinding northward.

This makes for better export and industrial output growth in the coming months.