Malaysia’s February exports jump 17.6% year on year to RM87.6 billion, biggest growth in 28 months

PETALING JAYA: Malaysia’s exports rose 17.6% to RM87.6 billion in February 2021, the highest year-on-year growth in 28 months driven by both domestic exports and re-exports.

Chief Statistician Malaysia Datuk Seri Mohd Uzir Mahidin said domestic exports – valued at RM71.4 billion – grew by 10.4% on-year, and contributed 81.6% to total exports; re-exports were valued at RM16.1 billion and went up by 65.0%.

February 2021 also registered strong growth in imports at RM69.7 billion, a 12.7% year-on-year increase, the strongest annual growth since July 2018.

The double-digit growth for exports and imports in February 2021 was regained after 12 months.

As a result, Malaysia’s trade surplus stood at RM17.9 billion, the 10th consecutive month of trade surplus since May 2020, and total trade rose 15.4% to RM157.3 billion.

The expansion in exports was supported by higher shipments to China (RM3.4 billion), the US (RM2.1 billion), Singapore (RM1.5 billion), Hong Kong (RM1.3 billion) and the European Union (RM1.0 billion). Main products that contributed to the rise in exports were electrical and electronic products (RM6.4 billion); rubber products (RM4.4 billion); petroleum products RM1.6 billion); chemical and chemical products (RM873.8 million) and manufacture of metal (RM799.1 million).

Meanwhile, increases in imports were mainly from China (RM6.2 billion), Indonesia (RM1.1 billion) and Thailand (RM819.3 million). Expansion in imports were noted for electrical and electronic products (RM2.6 billion); machinery, equipment and parts (RM922.7 million); chemical and chemical products (RM856.2 million) and rubber products (RM846.3 million).

Imports by end-use saw an increase for capital and consumption goods. Imports of capital goods surged by 39% or RM2.1 billion to RM7.6 billion. Consumption goods (8.5% of total imports) registered an increase of 17.6% from RM5.0 billion in February 2020 to RM5.9 billion. Imports of intermediate goods amounted to RM38.3 billion or 55% of total imports, a marginal decrease by 0.2% on-year.

Meanwhile, UOB’s global economics & markets research has revised Malaysia’s export growth projection to 15% from 4% forecast previously, given the surprise upside in February exports, further signs of global economic recovery and ongoing trade diversion and diversification.

It elaborated that despite the movement control order and a shorter working month, the country registered a substantial export expansion of 17.6% year on year, ahead of the research unit’s estimate of 6% and Bloomberg’s estimate of 7.1%.

In general, UOB opined that a sharp cyclical rebound in China’s economic growth and growing optimism surrounding the US economic outlook, alongside moderate recoveries across Asia, will help drive the recovery in global demand this year.

“The technology upcycle and acceleration in digital transformation should continue to boost demand for Malaysia’s electric & electronic products alongside rubber products,” it said.

It highlighted that the country’s diversified export base and robust trade linkages also play an important role in sustaining the gains in trade amid lingering uncertainties surrounding the pandemic and geopolitical tensions. “Moving forward, an acceleration in global inoculation programs and reopening of international borders are potential catalysts for the rosier export outlook.”