Malaysia’s External Trade Shows Positive Growth After 5-Month Taper, Maybank Affirms

Maybank IBG Research Report released today stated that Malaysia’s external trade has expanded as of Feb 2023.

February’s 2023 exports and imports growth accelerated to +9.8% YoY (Jan 2023: +1.4% YoY) and +12.4% YoY (Jan 2023: +2.2% YoY) while trade surplus widened to +RM 19.6 billion (Jan 2023: +RM 18.1 billion).

This year, amid softer global economic growth, Maybank expects export and import growth to slow to +4.0% (first two months of 2023: +5.4%; 2022: +25.0%) and +6.0% (first two months of 2023: +7.0%; 2022: +31.3%) with a trade surplus of +RM 240 billion (first two months of 2023: +RM 37.7 billion; 2022: +RM 255.5 billion).

Export growth in Feb 2023 picked up to end five consecutive months of downtrend, following the rebound in manufacturing exports (Feb 2023: +9.5% YoY; Jan 2023: -0.3% YoY) and a smaller decline in agriculture exports (Feb 2023: -9.0% YoY; Jan 2023: -19.8% YoY) amid sustained double-digit mining exports growth (Feb 2023: +34.8% YoY; Jan 2023: +50.1% YoY).

Manufacturing exports rebounded on higher shipments of petroleum products (Feb 2023: +67.5% YoY; Jan 2023; +87.5% YoY), electrical and electronic (Feb 2023: +11.7% YoY; Jan 2023: +4.9% YoY), optical and scientific equipment (Feb 2023: +6.6% YoY; Jan 2023: +3.6% YoY) and machinery, appliances and parts (Feb 2023: +6.4% YoY; Jan 2023: -12.5% YoY) to counter further declines in chemicals and chemical products (Feb 2023: -7.2% YoY; Jan 2023: -6.6% YoY), manufactured metals (Feb 2023: -4.5% YoY; Jan 2023: -34.9% YoY) as well as rubber products (Feb 2023: -35.5% YoY; Jan 2023: -44.9% YoY).

Slower decline in agriculture exports was contributed by a smaller drop in palm oil (Feb 2023: -14.4% YoY; Jan 2023: -27.6% YoY) reflecting lower price (Feb 2023: -23.2% YoY; Jan 2023: -18.4% YoY) as volume rebounded (Feb 2023: +11.5% YoY; Jan 2023: -11.2% YoY).

Mining exports continued to be supported by LNG (Feb 2023: +32.9% YoY; Jan 2023: +62.3% YoY) on increases in both price (Feb 2023: +26.6% YoY; Jan 2023: +37.0% YoY) and volume (Feb 2023: +5.0% YoY; Jan 2023: +18.5% YoY).

Crude oil shipments also increased (Feb 2023: +50.6% YoY; Jan 2023: +25.9%) on higher price (Feb 2023: +5.2% YoY; Jan 2023: +31.0% YoY) and volume (Feb 2023: +43.1% YoY; Jan 2023: -3.9% YoY).

Imports growth clocked faster growth as sustained growth momentum in imports for re-exports (Feb 2023: +37.6% YoY; Jan 2023: +33.5% YoY) was accompanied by rebounds in imports of intermediate goods (Feb 2023: +3% YoY; Jan 2023: -4.2% YoY) and consumption goods (Feb 2023: +1.2% YoY; Jan 2023: -4.8% YoY) amid flattish imports of capital goods (Feb 2023: -0.3% YoY; Jan 2023: -1.9% YoY).

Calendar effects of the Lunar New Year public holidays in Jan 2023 (vs in Feb last year) affected YoY exports and imports growth in the first two months of the year.

Similarly, the seasonally-adjusted exports (Feb 2023: +13.1% MoM; Jan 2023: -8.5% MoM) and imports (Feb 2023: +11.4% MoM; Feb 2023: -7.7% MoM) rebounded.

But on the non-seasonally-adjusted basis, exports (Feb 2023: -0.3% MoM; Jan 2023: -14.4% MoM) and imports (Feb 2023: -1.9% MoM; Jan 2023: -8.6% MoM) dropped for the second and fourth month in a row respectively, underscoring headwinds in the global economy, thus external demand.

Maybank maintained their conservative global real gross domestic product forecast (2023E: +1.9%; 2022E: +3.0%) as the upside from China’s reopening is now tempered by banking turmoil in the US and Europe.

Hence their outlook of slower 2023 exports and imports growth of +4.0% (first two months of 2023: +5.4%; 2022: +25.0%) and +6.0% (first two months of 2023: +7.0%; 2022: +31.3%), and a narrower trade surplus of +RM 240 billion (first two months of 2023: +RM 37.7 billion; 2022: +RM 255.5 billion).

Previous articleRHB Maintains Neutral Call For Telco Industry
Next articleRevenue Group CEO Reconsiders Resignation

LEAVE A REPLY

Please enter your comment!
Please enter your name here