Malaysia: Merchandise exports hit over 10-year high in March
Merchandise export growth soared to an over 10-year high in March, jumping 36.4% year-on-year in USD terms, following February’s 20.6% rise. Similarly, exports in ringgit terms expanded 31.0% (February: +17.6% yoy), which logged the best reading since May 2017, and beating market expectations of a 22.9% increase. March’s upturn was largely driven by higher shipments for electronic and electrical goods, rubber products as well as palm oil and palm oil based agricultural products.
Furthermore, merchandise imports surged 24.1% year-on-year in USD terms in March, above February’s 15.6% rise and logging the highest growth rate in nearly three years. As a result, the merchandise trade balance recorded a USD 5.9 billion surplus in March (March 2020: USD 2.9 billion surplus). Lastly, the trend improved further, with the 12-month trailing merchandise trade balance recording a USD 49.8 billion surplus in March, compared to the USD 46.8 billion surplus tallied in the prior month.
Commenting on March’s jump Julia Goh and Loke Siew Ting, economists at UOB, said:
“The year-to-date export recovery momentum remains in line with our expectation, supported by improving global demand, ongoing trade diversion and diversification, global tech upcycle, and favourable base effects. Release of pent-up demand, recovering labour market, and vaccine roll-outs are driving robust growth in the US and China, which propels global demand. The technology upcycle and acceleration in digital transformation will continue to drive demand for Malaysia’s E&E products, while ongoing COVID-19 containment and precautionary measures support external demand for Malaysia’s rubber and medical-related products. The country’s diversified export base and robust trade linkages have helped to sustain the gains in trade amid lingering uncertainties surrounding the pandemic and geopolitical tensions. […] We reiterate our 2021 full-year export growth forecast of 15.0%.”