The perception that Malaysia’s exports declined in 2023 is untrue, Deputy Investment, Trade and Industry Minister Liew Chin Tong told the Dewan Rakyat today (Mar 20).
Among the most important factors causing the value of exports to decrease is a decrease in prices palm oil CPO and petroleum prices.
In 2023, Malaysia’s trade performance surpassed the level RM2 trillion for three consecutive years which amounted to RM2.637 trillion, but reduced by 7.3% compared to 2022. This is following lower commodity prices and declines in the world semiconductor cycle as well as high base effects recorded last year.
For example, the market price of palm oil (CPO) last year decreased by 28% compared to 2022. Meanwhile, according to DOSM data, the amount or volume of palm oil exports for 2023 is 14.26 million tons, which is a decrease of only 4.3% compared to 14.91 million tons for 2022, Liew said, in reply to a question raised by Rita Sarimah Patrick Insol on the reasons why Malaysian exports were down in 2023 while the ringgit value had decreased substantially within the same period.
Liew said, considering E&E goods, petroleum products, CPO and palm oil related products and chemicals as well as LNG makes up 64.6% of the country’s total exports, so the value of exports in 2023 decreased due to commodity price factors and declining global demand.
However, it should be emphasised that Malaysia still maintains a 26 consecutive year trade surplus ever since 1998, worth RM214.06 billion.
“The country’s long-term strategy is to create economic complexity as outlined in Mission 1 of the New Industrial Master Plan 2030 to diversify the many industries and exports while reducing dependence on palm oil and petroleum exports.
“This is it the reason why the Government actively increases FDI and DDIs, mainly in the high value and technology sector.”
Lie added, in 2023, Malaysia recorded the highest approved investment in history, with a value of RM329.5 billion for the manufacturing, service and primary sectors, which is an increase of 23% compared to 2022.
From the amount involving as many as 5,101 projects, foreign investments amounting to RM188.4 billion, representing 57.2%, saw an increase of 15.3% compared to 2022.
While domestic investment recorded a value of RM141.1 billion or representing 42.8%, an increase of 35.1% compared to the previous year.
The service sector recorded the highest investment with accounted for more than half (51.1%) of the total investment approved which is RM168.4 billion, followed by the manufacturing sector as much as RM152 billion (46.1%) and the main sector as much as RM9.1 billion (2.8%).
New job opportunities created from these three sectors is 127,332 positions.
“The investment performance approved for the year 2023 clearly shows investors’ continued confidence in the prospects of the national economy, including as a preferred investment destination. This situation is also supported by various efforts and initiatives implemented by the Government through a Whole-of-Government approach.
In addition, MITI continues to be proactive in introducing policy reforms for further increasing investor confidence and strengthening the position Malaysia as a preferred investment destination to expand market access and increase the country’s exports, Liew added.
