Malaysia’s February exports down 0.8%, imports up 8.4%

Kuala Lumpur

MALAYSIA’S exports declined by 0.8 per cent year on year (yoy) to RM111.3 billion (S$31.6 billion) in February, dragged down by lower shipments of electronic and petroleum products, the Department of Statistics Malaysia said on Monday (Mar 18).

The decline missed the 2.4 per cent growth projected by 12 economists in a recent Reuters poll.

The latest figure reversed the performance of January, when exports rebounded 8.7 per cent yoy to RM122.4 billion, ending 10 consecutive months of contraction.

Imports in February, however, jumped 8.4 per cent from the year before, higher than the 7.8 per cent forecast by economists in the Reuters survey.

Overall, the country’s total trade increased 3.3 per cent yoy to RM211.7 billion in February. Trade surplus was valued at RM10.9 billion, but this was 44 per cent lower than RM19.6 billion for the same month the year before.

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The Ministry of Investment, Trade and Industry expects global trade to improve this year, riding on better growth prospects for the world’s two largest economies – the United States and China.

“This improved global outlook would also be supported by stronger private and public spending, as well as increased labour force participation, improved supply chains and cheaper energy and commodity prices,” said the ministry in a statement on Monday.

Kenanga Research shared a similar view, noting that policy easing in advanced economies would set in motion a more synchronised global economic recovery, which will fuel an export boom in the largely export-dependent emerging markets.

UOB economists Julia Goh and Loke Siew Ting noted that Malaysia’s trade recovery is underway, albeit bumpy, as the country continues recording export growth in the first two months of 2024.

For those first two months, the country’s total trade expanded 8.3 per cent yoy to RM446.4 billion. Exports and imports grew 3.4 per cent and 13.6 per cent, respectively.

In a co-authored report, Goh and Loke said the continued strength in import demand, particularly for the imports of intermediate goods, presages a positive export trend in coming months.

In a note on Monday, MIDF Research said the decline in overall exports in February mainly reflected the weaker exports to Hong Kong, Asean and European countries, which offset the improvement in exports to other major markets like the United States and China. 

“We expect further recovery in demand from major markets like China and the USA to support external trade performance this year, though we remain cautious the prolonged high interest rate setting could affect final demand from the advanced economies,” said the research firm.

In February, exports of manufactured goods – contributing 83.6 per cent of the total exports – slid 2.4 per cent yoy to RM93 billion.

This was due to lower shipments of electronic, petroleum and chemical products, offsetting export expansion for iron and steel, machinery and equipment, paper and pulp, as well as processed food products.

Shipments of agriculture products, which account for 6.1 per cent of total exports, declined by 4.8 per cent to RM6.8 billion from a year earlier, affected by lower shipments of palm oil products.

Exports of mining products, which form 9.7 per cent of total exports, rebounded 16.8 per cent to RM10.7 billion, driven by increased demand for liquefied natural gas and crude petroleum.

Exports to Singapore – the biggest destination market for Malaysia – fell 15.3 per cent yoy to RM15.7 billion, This came on the back of lower exports of electronic and petroleum products.

Exports to China – contributing 12.8 per cent of total exports – declined 0.4 per cent to RM14.3 billion, due to lower shipments of electronics products as well as metalliferous ores and metal scrap.

Imports of capital and consumption goods increased 30.3 per cent and 19.7 per cent, respectively. Imports of intermediate goods rose 14.3 per cent.

Imports from China – forming 19.4 per cent of total imports – increased 0.1 per cent to RM19.5 billion. This was driven by higher orders for machinery, equipment and parts, as well as iron and steel products.

Imports from Singapore – accounting for 12.4 per cent of total imports – increased 29.5 per cent to RM12.5 billion, on higher demand for electronics and petroleum products, as well as machinery, equipment and parts.