Malaysia announced its January trade figures with exports growth turning positive with total trade rebounding 13.3%yoy marking the first growth in 11 months. This was due to increases in both exports (+3.4%mom) and imports (+5.3%mom)
and the lower base in Jan-23.
Due to the relatively stronger rise in imports, monthly trade surplus reduced to a new post-pandemic low of +RM10.1b. Exports rebounded and registered the first annual growth after 10 months of contraction, growing at +8.7%yoy in Jan-24, above market expectations. Nevertheless MIDF in its review said the improving trend is in line with expectation in view of improving regional trade and better PMI reading in Jan-24. The breakdown shows exports growth was driven by increased re-exports (+4.1%yoy), while the rebound in domestic exports (+10.1%yoy) was mainly explained by the lower base effect.
Broadly, the exports growth in Jan-24 was driven by higher shipments of petroleum products and palm oil & palm oil-based products. From month-on-month perspective, monthly rise of +3.4%mom in exports was largely due to increased exports of manufactured products (+4.8%mom); overwhelmingly from petroleum products (+63.5%mom), which more than offset the
decline in E&E exports (-4.2%mom). Meanwhile, imports grew faster at +18.8%yoy in Jan-24, the fastest growth
in since Nov-22, driven mainly by purchases of E&E and petroleum products.
The house views the stronger-than-expected rebound in exports to be an encouraging development because we expect the recovery in external demand to contribute towards stronger economic growth this year, in addition to growing domestic demand
MIDF maintains its projection that export performance will rebound this year and grow at +5.2% (2023: -8.0%). Although the E&E exports remained below a year ago, the expected turnaround in the E&E trade will be one of the factors to support external trade recovery. The stronger-thanexpected rebound in Jan-24 was also in line in improving regional trade performance. In other words, Malaysia stands to benefit from the pick-up in regional production activities and improvement in global demand.
Nevertheless, it said several downside risks could disrupt trade outlook, such as worsening of geopolitical and trade tensions, lower demand from major trading partners and prolonged weakness in the global production activities. On another note, we expect Malaysia’s imports to rebound to +4.4% this year (2023: -6.4%), on the back of expanding domestic demand and improvement in manufacturing activities
