Exports in Malaysia

Malaysia - Exports (percent change)

Merchandise exports rebound sharply in February

Merchandise exports rebounded 10.5% in annual and USD terms in February from January’s 0.8% decline.

In ringgit terms, exports jumped 11.8% year-on-year in February (January: -1.5% yoy), which surpassed market expectations of 5.0% growth.

March’s 16-month high was driven by strong growth in exports of refined petroleum products; palm oil and palm oil-based products; and liquefied natural gas. That said, the print was somewhat flattered by a low base effect. On the downside, exports of electrical and electronic products declined in the month. Looking at Malaysia’s top export markets, demand from Singapore surged in February, while exports to the United States and China were also robust.

Imports also recovered sharply in February and reached an over one-year high, expanding 10.0% year-on-year in USD terms (January: -1.7% yoy). The rebound was driven by robust growth in imports of intermediate goods and consumer goods. On the other hand, capital goods imports fell notably.

The trade surplus rose to USD 3.0 billion in February from the USD 2.7 billion surplus in the same month a year prior (January 2020: USD 3.0 billion). Meanwhile, the 12-month moving sum of the trade surplus rose to USD 33.7 billion in February from USD 33.3 billion in January.

Malaysia’s external sector is poised to slump in the remainder of H1, as the pandemic constricts global trade flows and hampers supply chains. Moreover, temporary shut downs domestically and delayed investment will further interrupt the sector’s recovery.

FocusEconomics Consensus Forecast panelists expect exports to grow 3.6% and imports to expand 5.6% in 2020, with the trade surplus totaling USD 30.4 billion. In 2021, our panelists see export and import growth at 2.5% and 1.4% respectively, with the trade surplus reaching USD 33.7 billion.