KUALA LUMPUR, Feb 5, 2016:
Malaysia’s exports grew 1.4% in December, far slower than forecast by economists, due to continued weakness in global demand for commodities.
The median forecast from a Reuters poll of analysts had predicted a 5% expansion.
The global economic malaise has hit Southeast Asia’s third-largest economy hard, especially with the slowdown in demand for commodities in China, Malaysia’s biggest single trade partner.
The official data released today showed December’s earnings figures again showed sluggish earnings from liquefied natural gas (LNG), reflecting the trend from November’s data, while electronics and electrical products – Malaysia’s mainstay exports – showed positive growth.
Malaysia has had to pare down its 2016 Budget late last month with estimated savings of up to RM9 billion after oil prices fell below US$35 a barrel, far off the government’s estimated average of US$48 a barrel for Brent crude.
Bernama reported Malaysia’s total trade for 2015 grew 1.2% to RM1.466 trillion, with exports expanding 1.9% to a new high of RM779.95 billion and imports, up a marginal 0.4% to RM686.65 billion.
Following the better exports, the country’s trade surplus registered a double-digit growth of 14.3% to RM94.29 billion compared with the RM82.48 billion chalked up in 2014.
This was the ninth year that trade exceeded the RM1 trillion mark and the 18th consecutive year that Malaysia had recorded a trade surplus, said Second International Trade and Industry Minister Datuk Seri Ong Ka Chuan.
He said last year was challenging for the global economy with slow growth in emerging markets and developing countries while that of developed countries was modest.
“Falling commodity prices, especially that of crude oil, currency fluctuations, China’s softening economy and geopolitical tensions, all generated considerable headwinds that buffeted the global economy.
“Malaysia was also affected by this turbulence. Despite this, Malaysia’s trade performance exceeded the forecast,” Ong said today after announcing the country’s trade performance for last year.
The growth in exports was spearheaded by manufactured goods, which grew 6.5%, to RM625.46 billion and the manufactured goods segment accounted for 80.2% of total exports versus 76.7% in 2014.
Ong said exports from the manufacturing segment helped cushion the impact of lower commodity prices.
On export destinations, he noted that Asean remained Malaysia’s leading trading partner accounting for 27.4% of total trade.
The country’s exports to Asean rose by 2.8% to RM219.29 billion in 2015 while imports grew 3.7% to RM182.12 billion.
Ong also said Malaysia-Asean trade was expected to grow in tandem with the establishment of the Asean Economic Community and the intra-Asean trade would serve as a buffer for Malaysia in weathering global economic uncertainties.
Meanwhile, Malaysia’s exports to the US expanded 14.4% to RM73.67 billion while that to China improved 10% to RM101.53 billion.
Exports to the EU perked 8.4% to RM78.92 billion in 2015 while Malaysia’s exports to Turkey surged 54.5% last year due to the implementation of the Malaysia-Turkey Free Trade Agreement.
However, total exports to Japan, which is the country’s fourth largest trading partner, slipped 10.7% (RM8.81 billion) to RM73.81 billion due to a 7.2% drop in the export of LNG.
Electrical and electronics remained the largest export sector, accounting for 35.6% of total exports, followed by chemical and chemical products (+7.2%) and machinery and appliances (+20.5%).
“As for commodities, major commodities contributed just 15% (RM117.32 billion) to Malaysia total exports with crude petroleum, LNG and palm oil offtake expanding in volume but contracting in value terms.