Malaysia’s March exports highest in nearly four years, elevated expansion seen in coming months

Malaysia’s exports grew 31% to RM104.95 billion in March from a year earlier, the largest year-on-year expansion in nearly four years, boosted by higher global demand notably for electrical and electronic (E&E) products, mainly semiconductors used in 5G technology and high-performance computing, as well as rubber products.

(The Edge Markets) – This not only extended the double-digit growth in February of 17.6%, but also surpassed the RM100 billion mark – a level yet to be seen since July 2017 and ahead of Bloomberg‘s estimate of 22.7%.

Imports also saw the highest growth since October 2017, rising 19.2% to RM80.79 billion from a year earlier. Total trade expanded 25.6% to RM185.74 billion, while the trade surplus surged 96.1% to RM24.15 billion.

“Trade, exports, imports and trade surplus recorded double-digit growth for two consecutive months,” International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali said in a statement.

For the first quarter of 2021 (1Q21), total trade grew 14.8% from 1QFY20 to RM505.65 billion. Exports increased 18.2% to RM282.14 billion and imports rose 10.8% to RM223.51 billion. Trade surplus, meanwhile, expanded 58.6% to RM58.63 billion.

MIDF Research said apart from the low base effect, the latest external trade figures reflected a better than pre-pandemic levels performance, suggesting a successful return to normalcy.

“The performance thus far however was stronger than initially expected, with exports and imports growth averaging at +18.2% year-on-year and +10.8% y-o-y respectively for 1Q21,” the research house said in a note.

This prompted MIDF to revise upwards its 2021 exports and imports forecast to 13.5% and 12.7% y-o-y, from the earlier estimation of 8.1% and 8.7%.

Looking ahead, the research house said the growth is expected to remain elevated in the near months due to the low base effect of last year, adding that Malaysia will benefit from the strong recovery among its main trading partners, primarily China and the US.

“Malaysia’s trade performance is expected to rebound in 2021, carrying over the strong momentum seen in 2H20, on the back of resumption in activities globally driven by a return to normalcy in the global supply chain,” said MIDF.

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