[KUALA LUMPUR] Malaysia’s exports fell for the first time since August 2020 due to lower shipments of electrical and electronic products, according to data from the Department of Statistics Malaysia released on Wednesday (April 19).

While exports in March fell 1.4 per cent year on year to RM129.7 billion (S$39 billion), the decline was smaller than the 3.5 per cent fall projected by 15 economists in a recent Reuters poll.

Imports in March dropped 1.8 per cent year on year to RM103 billion after 27 consecutive months of increase. The decline in imports reversed analysts’ forecasts of a 1.9 per cent increase in that same survey.

Malaysia’s trade surplus in March expanded 36 per cent to RM26.7 billion, from RM19.6 billion in February. Compared to the previous month, trade, exports and imports in March grew by 13.5 per cent, 15.5 per cent and 11 per cent respectively.

In a research note on Wednesday, UOB economists Julia Goh and Loke Siew Ting said that the contraction of exports in March was in line with their expectations, as it reflected the effects of a higher base a year ago, a dimmer economic outlook and a global tech downcycle.

“Lingering global recession risks amid a tighter monetary policy environment will continue to suppress global demand this year. We maintain a cautious outlook for Malaysia’s exports with a projected growth of 1.5 per cent for 2023,” they added.

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With the anticipation that lower commodity prices will continue to influence the country’s trade performance in the next few months, MIDF Research revised their forecast for exports to 6.2 per cent in 2023 (from 9.2 per cent previously).

“The revision in exports reflects our assumption that the anticipated boost from China’s economic reopening will be delayed but we still expect recovering demand from China to positively boost Malaysia’s trade later this year,” said MIDF.

For the first three months of 2023, exports increased 2.8 per cent to RM354.6 billion, while imports grew by 3.7 per cent to RM290.2 billion. Total trade for the first quarter rose by 3.2 per cent to RM644.9 billion, while trade surplus decreased 1 per cent to RM64.4 billion.

Manufactured goods, which made up 84 per cent of total exports, dipped 0.4 per cent year on year to RM108.9 billion. This was largely due to lower exports of electrical and electronic, rubber and wood products.

The export of mining goods and agriculture products also fell by 3.5 per cent and 10.8 per cent respectively. This decline, however, was partially offset by higher exports of petroleum products, optical and scientific equipment, as well as machinery, equipment and parts.

Singapore continues to be the top contributor to Malaysia’s exports, accounting for 16 per cent of total exports. Exports to Singapore saw an increase of 3.1 per cent to reach RM20.7 billion, supported by stronger demand of petroleum products and iron and steel products, among others.

Exports to China, the second-highest contributor to Malaysia’s exports, saw a 6.2 per cent decline year on year in March to RM16.7 billion.