Malaysia will benefit from the strong recovery in China and the US
by HARIZAH KAMEL / pic by MUHD AMIN NAHARUL
MALAYSIA’S trade performance is expected to continue progressing buoyed by the resumption in economic activities globally as the world supply chain slowly regains its normalcy.
MIDF Amanah Investment Bank Bhd economist Mazlina Abdul Rahman told The Malaysian Reserve (TMR) yesterday that competitive commodities prices and spare capacity will be an additional impetus to the expected recovery.
“Investment appetite is also likely to improve propelled by better clarity amid vaccine availability. Malaysia will benefit from the strong recovery in our main trading partners China and the US.
“Vaccine rollout along with massive fiscal and monetary policy support in major economies will boost demand,” she said.
Malaysia’s trade in February 2021 registered a double-digit growth of 15.4% to RM157.27 billion compared to the same month last year, according to the International Trade and Industry Ministry (MITI).
Trade, exports, imports and trade surplus posted a new high for February with exports accelerated by 17.6% to RM87.57 billion, while imports rose by 12.7% to RM69.7 billion and trade surplus surged by 41.6% to RM17.86 billion.
MITI said exports maintained its year-on-year (YoY) positive growth for six consecutive months. This expansion was also the fastest since October 2018.
Mazlina said the YoY double-digit growth in both exports and imports recorded was partially due to the low base last year.
She added that electrical and electronic (E&E) products contributed the most to the 17.6% YoY growth in overall exports at 8.2% points and followed by rubber products with 5.9% points.
“Rubber products, in particular, will continue to support Malaysia’s export performance this year as the demand for it remains bright mainly to administer the vaccines,” she said.
By destination, she said exports to most of Malaysia’s key trading partners continued expanding sturdily in February.
Among Asean countries, exports to Indonesia and Thailand returned to growth after 10 months and 20 months of negative growth respectively, showing some signs of recovery in demand for our products from the bloc post-Covid-19, said Mazlina.
“Despite solid YoY growth, on a monthly basis, total trade declined 3.3% month-on-month where exports and imports fell 2.3% and 4.5% respectively.
“Nevertheless, both exports and imports valued at RM87.57 billion and RM69.7 billion respectively in February 2021 remained well above 2020’s average of RM81.7 billion and RM66.3 billion, suggesting good progress towards recovery,” she said.
MITI said between January and February 2021, exports recorded double-digit growth of 11.7% to RM177.19 billion compared to the same period of 2020.
Imports rose by 6.6% and total trade expanded by 9.4%. Trade surplus surged by 39.8%.
Exports of manufactured goods in February, which contributed 86.6% to total exports, registering a double-digit growth of 20.1% YoY to RM75.83 billion mainly due to higher exports of E&E, rubber and petroleum products.
This was contributed mainly by higher demand for semiconductors for smart devices, 5G network and the automotive industry as the global economic activities continued to recover.
As for imports, MITI said total imports in February 2021 grew by 12.7% YoY to RM69.7 billion from February 2020. The three main categories of imports by end-use which accounted for 74.4% of total imports were intermediate, capital and consumption goods.
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