Malaysia: Exports surged to multi-year highs in March – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assess the latest trade data in Malaysia.

Key Quotes

“Export growth came in much stronger-than-expected at 31.0% y/y in Mar (Feb: +17.6%), with the absolute export value reaching a record high of MYR104.9bn (Feb: MYR87.6bn). March’s export growth marked the highest monthly reading since Jul 2017. It came ahead of ours (+18.5%) and Bloomberg (+22.7%) estimates. Imports advanced 19.2% y/y (Feb: +12.7%) to the highest ever level at MYR80.8bn (Feb: MYR69.7bn). This lifted the trade surplus by 96.1% y/y to MYR24.2bn (Feb: +41.7% to MYR17.9bn).”

“Exports strengthened 18.2% y/y while imports rose 10.8% y/y in 1Q21. The strong trade performance augers well for the current account surplus and helps to cushion the impact of COVID-19 containment measures on overall GDP during the quarter. We estimate that the MYR58.6bn trade surplus in 1Q21 (4Q20: +MYR59.9bn) to translate into a current account surplus of ~MYR18.0bn last quarter (4Q20: +MYR19.0bn). Exports increased at a faster pace relative to imports, net trade is expected to contribute positively to overall GDP in 1Q21.”

“The year-to-date export momentum is in line with our expectations, supported by improving global demand, ongoing trade diversion and diversification, global tech upcycle, and favourable base effects. We reiterate our 2021 full-year export growth forecast of 15.0% (2020: -1.4%). Potential upside catalysts to our export outlook include progressive global vaccination roll-outs and faster reopening of international borders, while downside risks could come from new COVID19 variants, delays or less effective vaccines that could slow the global recovery.”