This article first appeared in The Edge Financial Daily on July 26, 2017 - August 1, 2017

KUALA LUMPUR: It is unlikely for Malaysia to sustain its double-digit export growth streak in the long term due to capacity constraints, according to Sunway University Business School economics professor Dr Yeah Kim Leng.

“We expect the [double-digit] export growth to continue for the next couple of months at least, based on strong PMI [purchasing managers’ index] seen in other countries, particularly China.

“However, due to capacity constraints, it is not likely to continue for long. Let’s say in the next six to nine months, I think it will slow down as most industries are recording over 80% capacity utilisation,” he told reporters on the sidelines of the 2017 International Monetary Fund-Bank Negara Malaysia Summer Conference yesterday.

Malaysia’s exports in May 2017 grew by 32.5% to RM79.4 billion, marking six consecutive months of double-digit growth.

On whether there are growing government debt concerns due to heavy inflow of investment from China, Yeah said a proper plan needs to be put in place by the relevant authorities to look into the total costs of the funding provided.

“We need to have a proper plan and agency to look into the total costs of funding all these projects, and the plan needs to ensure there is no inter-generation transfer of debts, and most importantly, to ensure we do have the debt-servicing capacities.

“I am sure the government continues to maintain its ability to repay these projects, but we need to be vigilant, especially with the [funding] of the big projects,” he said.