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Malaysia Trade Balance March 2020

Malaysia: Exports contract at steepest rate in over a year in March

Merchandise exports fell 8.8% in annual and USD terms in March, contrasting February’s 10.5% increase. In ringgit terms, exports declined 4.7% in March (February: +11.8% year-on-year), which was better than market expectations of a sharper 8.0% drop.

March’s contraction was largely driven by a sharp fall in exports of electrical and electronic products, and liquified natural gas, while shipments of palm oil and palm oil-based products also dipped in the month. Conversely, exports of refined petroleum products surged in March. Looking at Malaysia’s top export markets, demand from China and the U.S. waned, whereas exports to Singapore strengthened.

Imports also experienced a sharp downturn in the month, contracting 7.1% year-on-year in USD terms (February: +10.0% yoy). In ringgit terms, imports fell 2.7% in March (February: +11.3% yoy). The drop was due to plunging imports of capital goods. On the other hand, imports of intermediate goods and consumer goods rebounded in the month.

As the decline in exports outpaced that of imports, the trade surplus consequently narrowed to USD 2.9 billion in March from the USD 3.5 billion surplus recorded in the same month last year and the USD 3.0 billion surplus in February. Meanwhile, the 12-month moving sum of the trade surplus fell to USD 33.0 billion in March from USD 33.7 billion in February.

Malaysia’s external sector is poised to slump further 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 activity in the external sector.

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