Malaysia’s export growth remained robust at 38% year-on-year (y-o-y) in July 2026, supported by strong electrical and electronics (E&E) shipments, while imports continued to expand at a brisk pace, according to CGS.
CGS said export growth remained broad-based, with manufactured goods leading the expansion amid sustained demand for E&E products, optical and scientific equipment as well as machinery, equipment and parts.
Manufactured goods exports rose 42.6% y-o-y in July, while E&E exports jumped 51%, supported by robust artificial intelligence (AI)-related demand and stronger shipments to Singapore and the United States.
Mining product exports also increased 9.6%, driven by higher shipments of metalliferous ores, liquefied natural gas (LNG) and tin. Agriculture exports recorded more modest growth of 5.6%.
The strong export performance helped widen Malaysia’s trade surplus to RM22.5 billion in July, bringing the cumulative surplus for the first seven months of 2026 to RM170.5 billion, sharply higher than RM71.4 billion in the corresponding period last year.
Imports Remain Strong
Imports increased 36.4% y-o-y in July, moderating from 43.1% growth in June but remaining elevated.
CGS said the expansion was led by intermediate goods, which rose 40.8% y-o-y, reflecting sustained demand for production inputs linked to strong E&E exports.
Capital goods imports increased 24%, pointing to continued investment activity, while consumption goods imports grew at a more modest 5.2%.
The research house expects imports to remain well supported in the coming months, underpinned by continued export strength, particularly in E&E products.
Commodities Could Provide Additional Support
CGS maintained a positive outlook for Malaysia’s exports in the second half of 2026, with E&E expected to remain the main driver of trade performance.
However, commodity-related exports could provide additional support, particularly petroleum-related products and palm oil.
Petroleum-related exports are expected to benefit from firm energy prices and sustained demand from regional markets. CGS said resilient manufacturing activity in China should also support demand for industrial and energy-related products.
The research house cautioned that volatility in global oil prices remains a key risk to the outlook.
Palm oil exports, meanwhile, could offer stronger support in the coming months as prices remain favourable amid tightening supply conditions, geopolitical uncertainties and firm biofuel demand.
According to the Malaysian Palm Oil Council (MPOC), crude palm oil prices are expected to remain above RM4,600 per tonne in September 2026.
Forward contracts for 2027 were also trading above RM5,000 per tonne in mid-August, reflecting expectations of tighter supply conditions and stronger biodiesel demand in Indonesia.
CGS said the price outlook could support palm oil export growth even if export volumes moderate.
Protectionism Remains Key Risk
Despite the upbeat outlook, CGS highlighted several risks to Malaysia’s external trade performance.
A moderation in global economic growth could weigh on external demand and commodity consumption, while lower crude oil prices could affect petroleum-related exports.
The research house also flagged stronger protectionist measures among major economies as a key risk, noting that such policies could disrupt global trade flows and weaken business confidence.
Nevertheless, CGS expects Malaysia’s exports to have further room to expand in the second half of 2026, supported by resilient manufacturing demand, particularly for E&E products, alongside energy-related shipments and favourable palm oil prices.
