Malaysia: Merchandise exports jump year-on-year in February, surprising on the upside
Merchandise exports skyrocketed in February, growing 20.6% year-on-year in USD terms (January: 7.6% yoy), logging the sixth consecutive month of expansion and the best reading in nearly three years. Similarly exports in ringgit terms expanded 17.6% in February, notably above January’s 6.6% rise and beating market expectations of a softer increase. February’s jump largely reflected higher shipments for electrical and electronic goods, rubber products, as well as petroleum products.
Similarly, merchandise imports expanded 15.6% year-on-year in USD terms in February, well-above January’s 2.3% rise. As a result, the merchandise trade balance logged a USD 4.4 billion surplus in February (February 2020: USD 3.0 billion surplus). Lastly, the trend improved further, with the 12-month trailing merchandise trade balance recording a USD 46.8 billion surplus in February, compared to the USD 45.4 billion surplus tallied in the prior month.
Euben Paracuelles and Rangga Cipta, analysts at Nomura, noted:
“The surprise improvement in export growth in February is indicative of upside risks to our forecast for the current account surplus to narrow to 3.6% of GDP in 2021 from 4.4% in 2020. While we still believe the extended terms-of-trade gains that have been in place since mid-2020 likely ended, Malaysia is less sensitive to oil price increases than the rest of ASEAN. As we still expect borders to remain shut for most of the year, we still see a drag on the overall current account, but the goods trade surplus appears poised to benefit more from stronger external demand for electronics, which we expect to accelerate only in H2.”