Trade-led recovery set to continue
19 Apr 2022
Another record-breaking export print in March has provided continued optimism for Malaysia’s trade-led economic rebound in 2022, economists said.
The 25.4 per cent year-on-year (yoy) export growth last month was a signal that recoveries were gaining ground in the country, they added.
Malaysia’s total trade posted a double-digit growth of 27.3 per cent yoy during the month to reach a new high of RM236.6 billion, the International Trade and Industry Ministry said.
Export and import values in March once again broke the record for all-time monthly highs at RM131.6 billion and RM104.9 billion respectively.
The ministry said the data from Department of Statistics Malaysia (DOSM) showed robust export growth, contributing mainly by solid external demand for electrical and electronic (E&E) products and commodity-based products.
The E&E products soared to a record high in March due to stronger exports of electronic integrated circuits underpinned by growing digitalisation trends.https://81b95c184a8e4e5e9da57738b22cc01f.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
“Exports to major markets notably Asean, China, the United States, the European Union and Japan recorded double-digit growth. Highest export monthly value was registered to Asean, the EU and Japan,” the ministry said today.
Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the latest statistical print showed that the country was the direct beneficiaries of the global economic recovery.
“The double-digit growth suggests that the contribution from the net exports are likely to be significant to the first quarter (Q1) 2022 gross development product which will be announced in May,” Afzanizam told the New Straits Times.
Despite that, Afzanizam said Malaysia’s purchasing managers’ index had fallen below the 50 points demarcation line in March. This would mean manufacturers had grown wary over the global growth prospects this year.
“The International Monetary Fund has already indicated that they might want to cut their global GDP growth for 2022 and 2023 lower, which they will announce this week. So it is a question of the sustainability and durability of the recovery.
“For now, it is still fluid but we are hopeful things will get better because of the reopening of the international borders which will support the domestic economy,” he added.
Putra Business School economic analyst Associate Professor Dr Ahmed Razman Abdul Latiff sees Malaysia’s economy firmly on the path to recovery, after recording improvements in its total trade number.
Ahmed Razman said the increase in total trade numbers in March compared to the previous month showed that Malaysia had benefited from better global demand.
“With the higher demand for our commodities such as oil and palm oil, coupled with the continuing Russia-Ukraine crisis which opened up opportunity for our Malaysian producers to keep up with the demand, I foresee that we will see a continuous double digit growth on month to month basis for the rest of the year,” he said.
OCBC Bank economist Wellian Wiranto said the 25.6 per cent expansion in Malaysian exports was miles north of the 10.4 per cent that market had expected and ahead of the 16.8 per cent yoy of February.
“Out-shipment of petroleum products and LNG were up 96.5 per cent and 100.5 per cent, respectively, even as Malaysia continued to benefit from the semiconductors boom, with E&E shipment at 32.8 per cent yoy. On the flip side came imports surprises too, however. Malaysia’s imports came in close to 30 per cent yoy versus 16.4 per cent,” Wellian added.
Elaborating on the trade numbers, the ministry said the rise in imports were noted for E&E products, crude petroleum, petroleum products, chemical and chemical products, machinery, equipment and parts, metalliferous ores and metal scrap and coal.
On a month-on-month (m-o-m) basis, trade, exports, imports and trade surplus recorded double-digit growth of 28.1 per cent, 28.7 per cent, 27.3 per cent and 34.8 per cent respectively.
“Total trade for Q1 of 2022 grew by 23.6 per cent to RM624.86 billion, compared to Q1 2021. Exports increased by 22.2 per cent to RM344.97 billion and imports expanded by 25.2 per cent to RM279.89 billion. Consequently, trade surplus recorded a higher value of RM65.1 billion,” it said.
The ministry added that the rise in exports was attributable mainly to higher exports to Singapore (RM5.1 billion), followed by Japan (RM2.1 billion), South Korea (RM1.8 billion), the EU (RM1.8 billion), China (RM1.7 billion), Taiwan (RM1.4 billion), Thailand (RM1.4 billion), Indonesia (RM1.4 billion), and the United States (RM1.3 billion).
China was a key contributor to the increase in imports, which increased by RM3.4 billion, followed by Saudi Arabia (RM2.9 billion), Taiwan (RM2.8 billion), Indonesia (RM2.5 billion), Singapore (RM2.3 billion), the United States (RM1.4 billion) and Thailand (RM1.2 billion).