Malaysia’s exports jump 9.1% in April, but remain below economists’ forecast
Exports growth driven by higher shipments of machinery, chemicals and palm oil products
[KUALA LUMPUR] Malaysia’s exports grew 9.1 per cent year on year (yoy) in April to RM114.7 billion (S$33 billion) after two consecutive months of contraction, said the Department of Statistics Malaysia on Monday (May 20).
While the final export figure reversed March’s 0.8 per cent decline, it undershot an earlier forecast of 14.1 per cent by 13 economists in a recent Reuters poll.
The rebound in exports growth was driven by higher shipments of items such as machinery, equipment and parts, chemicals and palm oil products.
Imports in April expanded by 15.6 per cent yoy to RM107 billion due to increasing demand for intermediate goods used for the manufacturing sector. This is also below economists’ projection of 17.8 per cent in the same poll.
With these figures, Malaysia’s trade recorded double-digit growth of 12.1 per cent yoy to RM221.7 billion in April, the fourth consecutive month of expansion. The country recorded a trade surplus of RM7.7 billion in April, lower than RM12.7 billion in March.
Despite the exports and import growth falling short of expectations, economists expect a trend improvement in export growth supported by electrical and electronic exports as global demand improves.
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In a co-authored report, UOB economists Julia Goh and Loke Siew Ting said the robust import growth of intermediate goods suggests that the overall export recovery remains on track.
“Barring any unexpected trade protectionism measures by the West, we keep our trade outlook for Malaysia with a projected export growth of 3.5 per cent for this year,” they said in a report on Monday.
OCBC senior Asean economist Lavanya Venkateswaran expects some normalisation in year-on-year export growth as favourable base effects fade.
“However, resilient growth prospects and solid external balances amid benign inflationary pressures will allow Bank Negara Malaysia to keep its policy rate unchanged in 2024,” she added.
Brian Tan, Barclays senior regional economist, noted that the narrowing trade surplus could be due to seasonal factors such as festive holidays; and the decline in April 2024 was much milder if compared to the same period in 2019 to 2023.
From January to April, total trade grew by 8.3 per cent to RM912.2 billion from a year earlier. Exports and imports expanded by 3.8 per cent and 13.7 per cent, respectively. Trade surplus for the first four months totalled RM41.8 billion.
In April, exports of manufactured goods – contributing 84.8 per cent of the total exports – increased by 7.1 per cent yoy. Shipments of agricultural and mining products, which form 7.2 per cent each of the total exports, went up by 13.8 per cent and 27.5 per cent, respectively.
Exports to Singapore – the biggest destination market for Malaysia – increased by 9 per cent yoy to RM18.2 billion, due to higher exports of electronic products as well as machinery, equipment and parts.
Exports to China – contributing 12.3 per cent of total exports – increased by 2.1 per cent to RM14.1 billion, supported by higher shipments of paper and pulp products, chemicals and chemical products as well as manufacturers of metal.
Imports of capital and consumption goods increased by 19.5 per cent and 9.7 per cent, respectively. Imports of intermediate goods rose by 30.5 per cent.
Imports from China – forming 23.1 per cent of total imports – increased by 22 per cent to RM24.7 billion. This was driven by higher orders for electronic products as well as machinery, equipment and parts as well as iron and steel products.
Imports from Singapore – accounting for 13 per cent of total imports – went up by 35.5 per cent to RM14 billion, on higher demand for electronics and petroleum products.
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