Despite encountering a challenging 2020, Malaysia managed to achieve a remarkable trade hitting RM1.77 trillion only a slight dip compared to 2019. Given the circumstances this achievement is laudable compared to regional trade figures from Singapore, Indonesia and Thailand.
Overall global trade was severely disrupted as a result of the stringent lockdown measures imposed across the board due to the COVID-19 pandemic. This had directly caused major disruptions to global supply chains, especially movement of goods and services, and severely affected manufacturing activities. Malaysia was not spared in the disruption, however we were able to perform fairly well with exports rebounding in the second half of 2020 as compared to the negative growth recorded in the first half of the year.
Our total export was at RM980.99 billion down by 1.4% while our imports was at RM796.19 a decline of 6.3% exports to China recorded a new high and similar momentum was reported for the United States which posted the largest value in the last decade. There was significant export growth to the emerging markets notably Costa Rica, Kazakhstan, Kenya, Nigeria, Ghana and Cote d’Ivoire. Rubber products, electrical and electronics (E&E) products, as well as palm oil and palm oil-based agriculture products registered strong export expansion.
Meanwhile, the country also hit a new record in trade surplus being highest ever maintaining a sustained surplus trend for 23 consecutive years since 1998. While trade with existing Free Trade Agreement (FTA) partners in 2020 stood at RM1.185 trillion, registering a decrease of 3.7% and accounted for 66.7% of Malaysia’s total trade, the recent signing of the Regional Comprehensive Economic Partnership (RCEP), the biggest FTA in the world, will provide Malaysian companies and businesses access to more than a third of the world’s market, attract foreign direct investment and will be a boon to our export growth.
Looking ahead, Malaysia is in a good position bolstered by investor confidence with Moody’s latest affirmation of Malaysia’s local and foreign currency long-term issuer ratings at A3, with a stable outlook. This is a testament to the Government’s strong fiscal discipline and robust medium-term growth prospects and demonstrates Moody’s confidence in Malaysia as having strong credit standing.