Malaysia: Merchandise exports rebound in December
Merchandise exports grew 4.0% year-on-year in USD terms in December, rebounding from the 4.6% decline in November and marking the first rise since last July. In ringgit terms, exports increased 2.7% in December, contrasting November’s 5.5% fall drop and surprising market expectations of a 1.0% contraction.
December’s recovery was driven by a sharp rebound in shipments of refined petroleum products, amid higher global crude oil prices in the month, and palm oil products. Conversely, exports of electrical and electronic products continued to decline in December. Looking at Malaysia’s top export markets, demand from ASEAN, the U.S. and China increased, whereas demand from Singapore declined.
Imports, meanwhile, recovered 2.2% on an annual basis in USD terms in December from the 2.7% contraction in November. The uptick came on the back of increased imports of intermediate goods and consumption goods, while capital goods imports continued to shrink in December.
As exports outpaced imports in December, the trade surplus rose to USD 3.0 billion in December from the USD 1.6 billion surplus in November (December 2018: USD 2.6 billion). Meanwhile, the 12-month moving sum of the trade surplus rose to USD 33.2 billion in December from USD 32.8 billion in November.
Commenting on the outlook for Malaysia’s external sector, Prakash Sakpal, economist at ING, noted:
“The almost 20% fall in crude oil prices so far this year bodes ill for Malaysia’s commodity-driven trade growth coming into 2020. The outbreak of the coronavirus in China and its global spread means continued weak export growth ahead. And, just as in Thailand, the virus also poses a threat to Malaysia’s tourism sector. All this, in turn, means continued weak GDP growth this year.”