Malaysia Trade September 2019


Malaysia: Exports slump in September

November 4, 2019

Exports slumped 7.3% year-on-year in September, even more sharply than August’s 2.9% decrease and missing market analysts’ expectations of a smaller contraction. September’s reading came on the back of weak demand for electronics and fuels. Exports to China, one of Malaysia’s largest trading partners, fell 3.0% year-on-year in local currency terms, likely reflecting the ongoing effect that U.S.-China trade tensions are having on external demand.

Imports, meanwhile, rose 1.7% year-on-year on higher inflows of intermediate, consumption and capital goods. This contrasted August’s 14.4% decline and beat market expectations.

Consequently, the trade surplus fell to USD 2.0 billion in September from USD 3.8 billion in September 2018, while the 12-month moving sum of the trade surplus in September fell to USD 33.1 billion from USD 34.9 billion a month prior.

Looking forward, research analysts at Nomura see a further deterioration ahead, commenting:

“We expect further export weakness owing to cooling foreign demand and the deepening tech downcycle. Because of Malaysia’s exposure to trade, negative spill-over effects on domestic demand from the weakening export sector (?as is already evident in plunging car sales in Q3 and subdued credit growth) are likely to continue.”

FocusEconomics Consensus Forecast panelists expect exports to grow 2.0% and imports to expand 2.4% in 2020, with the trade surplus reaching USD 34.6 billion. In 2021, our panelists see export and import growth at 7.0% and 7.8% respectively, with the trade surplus reaching USD 35.3 billion.

Author:, Economist

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Malaysia Trade Chart

Malaysia Trade12m September 2019 1

Note: 12-month trade balance in USD billion and annual variation of the 12-month sum of exports and imports.
Source: Department of Statistics Malaysia (DSM) and FocusEconomics calculations.

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