Feb 2024 saw exports decline slightly while imports growth eased reflecting the calendar effect of Lunar New Year holidays in an already short month. Exports and imports growth of +3.9% and +13.6 in 2M 2024 vs -8.0% and -6.4% drops in 2023 signal external trade rebounding to support the outlook of firmer economic growth this year.
Exports decline marginally in Feb 2024 as lower exports of Manufacturing and Agriculture countered the rebound in Mining shipments.
Manufacturing exports dropped on declines in the exports of E&E products, Petroleum Products and Chemical & Chemical Products (excluding Plastic).
Agriculture exports fell following the reversal in palm oil exports due to lower export price while export volume growth moderated. Mining exports rebounded as LNG exports recovered on the increase in export volume offsetting export price decline together with higher crude petroleum exports, similarly on higher export volume offsetting lower export price.
Imports growth was sustained by the double-digit growth in imports of capital goods intermediate goods and consumption
goods while imports for reexports dropped.
But positive 2M 2024 augurs well for full-year outlook
The “volatile” external trade figures in the first two months of 2024 reflected the calendar effect i.e. Jan 2024 external trade was boosted by shipments ahead of the Lunar New Year that fell in already short month of Feb 2024 that comes with extended shutdowns domestically and regionally (e.g. 10-day holidays in China; week-long holidays in Vietnam).
But external trade’s positive start to 2024 as per the +3.9% exports growth in 2M 2024 augurs well for the expected rebound in exports this year to support the outlook of firmer 2024 economic growth of +4.4%. At the same time, the firmer growth in imports of capital goods and consumption goods plus rebound in imports of intermediate goods signal firmer domestic demand and industrial activities.
For this year, Maybank IB said it currently expects exports and imports to rebound by +4.7% and +5.6% respectively. A major driver for the projected exports rebound this year is the projected turnaround in electronics cycle as WSTS expects global semiconductor sales to rebound by +13.1% in 2024. Although E&E exports are still down YTD, Malaysia Semiconductor Industry Association (MSIA) expects the industry to rebound in 2H 2024
