KUALA LUMPUR: Malaysia's latest trade data reflects the fragile state of global demand, with exports falling 0.8 per cent year-on-year against consensus estimates of a 2.4 per cent growth, said economists.
Total trade grew 3.3 per cent to RM211.79 billion year-on-year in February, but stronger imports growth saw the trade surplus narrowing to RM10.87 billion.
The Investment, Trade and Industry Ministry said exports dropped slightly by 0.8 per cent to RM111.33 billion, while imports rose 8.4 per cent to RM100.46 billion.
"Trade surplus was valued at RM10.87 billion, marking the 46th consecutive month of surplus since May 2020," the ministry said yesterday.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the trend is not unique to Malaysia as other economies in Asia, including Singapore, South Korea and Taiwan, also experienced weaker export performances.
Citing an example, he said South Korea and Taiwan saw their export growth dropping to 4.8 per cent and 1.8 per cent, respectively, in February, a significant decrease from the double-digit growth recorded in January (18 per cent and 18.1 per cent, respectively).
He said Singapore recorded a 0.1 per cent contraction in non-oil domestic exports in February, following a strong 16.7 per cent growth in January.
"Despite the challenges in the global trade environment, Malaysia's import figures provide a silver lining. Imports of capital and consumption goods grew 30.3 per cent and 19.7 per cent, respectively, in February, indicating resilient domestic demand."
Putra Business School economic analyst Assoc Prof Dr Ahmed Razman Abdul Latiff expects Malaysia's trade performance to continue to grow based on several factors.
"China's economy is expected to recover this year, which will likely drive demand for Malaysian exports.
"Additionally, Malaysia's gross domestic product (GDP) is expected to grow 4.0 to 5.0 per cent this year, providing a strong foundation for trade expansion," he said.
Malaysia's exports expanded 3.9 per cent to RM233.74 billion in the first two months of 2024. This brings the total trade to to RM446.43 billion, an 8.3 per cent growth year-on-year.
The ministry said this was driven by higher exports of iron and steel products, machinery, equipment and parts as well as petroleum products.
Imports climbed 13.6 per cent to RM212.69 billion, providing a trade surplus of RM21.04 billion. Compared to January, trade surplus expanded 6.9 per cent for February.
The ministry expects the global trade to recover this year, supported by stronger private and public spending, as well as increased labour force participation, improved supply chains and cheaper energy and commodities.
The World Trade Organisation has forecast a 3.3 per cent growth in merchandise trade in 2024, while the International Monetary Fund (IMF) has forecast global trade to grow by 3.3 per cent.
The IMF also expects global GDP to grow 3.1 per cent.
"These figures will be contributed by better growth prospects for the world's two largest economies, the United States and China, Malaysia's two top trading partners," said the ministry.