skyline at night in Malaysia

Malaysia Trade October 2019

Malaysia: Export downturn extends into Q4

Exports sank 7.5% year-on-year in annual terms in October, down from the 7.3% decline recorded in September; however, the print was better than expected by market analysts. In ringgit terms, exports fell 6.7% in October, matching September’s drop. October’s fall was largely broad-based and was driven particularly by a drop in exports of electrical and electronic products, palm oil and refined petroleum products. Looking at Malaysia’s top export markets, demand from China and ASEAN both declined in the month, whereas exports to the U.S. and Singapore increased in the month.

Imports, meanwhile, fell 9.5% in annual terms in October, contrasting the 1.7% increase in September. The decline was due a sharp contraction in import growth of capital goods, while intermediate goods and consumer goods imports also shrank in the month.

As the contraction in imports outpaced that of exports, the trade surplus consequently rose to USD 4.1 billion, which marked a one-year high (October 2018: USD 4.1 billion; September 2019: USD 2.0 billion). Meanwhile, the 12-month moving sum of the trade surplus rose to USD 33.2 billion in October from September’s USD 33.1 billion.

Commenting on October’s results, Prakash Sakpal, ING economist, noted:

“As elsewhere in Asia, the worst of Malaysia’s trade downturn appears to be over […] that said, resurgent US-China trade tension bodes ill for the near-term recovery, which could be painfully slow.”

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