KUALA LUMPUR: Malaysia’s total trade performance in 2019 eased 2.5 per cent to RM1.835 trillion from RM1.876 trillion recorded in 2018, according to International Trade and Industry Ministry.
Its deputy minister Dr. Ong Kian Ming said the lower trade was dragged by softer global demand due to trade tensions and unfavourable external economic conditions.
“The decline in total trade was also due to lower demand from Malaysia’s major trading countries, especially with Singapore, Hong Kong, France, Thailand and Japan,” he said at a press conference on Malaysia’s trade performance here today.
Ong said Malaysia’s export was impacted by the downturn in semiconductor and lower commodity prices including crude palm oil and crude oil as most prices were in the doldrums.
The country’s export dropped marginally 1.7 per cent to RM986.4 billion from RM998.01 billion previously, while imports declined 3.5 per cent to RM849.01 billion from RM877.74 billion.
“In lieu of a very challenging 2019, there were a lot of headwinds for Malaysia as well as other open trade economies last year. While the global commodity prices, CPO and oil prices have somewhat recovered towards the end of last year, large portions of the year—affected our overall figures,” said Ong.
He said Malaysia’s trade surplus in 2019 continued to register a double-digit growth for three consecutive years, widening by 11 per cent to RM137.39 billion from RM123.78 billion recorded in 2018.
“This was the largest trade surplus since 2009, representing Malaysia’s achievement of 22nd consecutive year of trade surplus,” he added.
Ong said the increase in trade surplus was due to decline in import compared to export, could be attributed to slowdown of electrical and electronic global supply chain.
“But I do not think it is a big worry, as long as our domestic manufacturing still on the rise it will help our local supply chain,” he said.
On the 2020 trade outlook, Ong said the ministry had set a target of RM2 trillion prior to the coronavirus outbreak with a two per cent growth for both import and export.
“This is a good target as we were not able to reach it last year. Perhaps with the improving global situation and global trade as well as crude oil and CPO, it will be beneficial to Malaysia,” he said.
Ong said it was still early for the ministry determine the impact on Malaysia’s trade resulted from the coronavirus epidemic.
“With some disruption in China and global supply chain, it may prevent manufacturing activities but we could not determine the negative effects,” he said.
Ong expects the slowdown in Chinese economy in the first-quarter of 2020 to affect the supply value chain more than SARS had in 2003.
“We hope as the situation stabilises, with more certainties in a few weeks, we hope to see V-shape rebound in the second-quarter of 2020 not only in China and other countries,” he said, adding that the ministry will closely monitor Malaysia’s trading partners and related sectors.
For the fourth quarter of 2019, Malaysia’s total trade reduced 3.6 per cent to RM479.2 billion, from RM497.3 billion previously.
“Significant increases in trade were recorded with China, the United Arab Emirates, Indonesia and the United States,” he said.
Exports for the quarter decreased 3.3 per cent to RM257.9 billion, while imports declined 4.0 per cent to RM221.4 billion.
The total trade in December 2019 rose 1.9 per cent year-on-year to RM160.2 billion, following six consecutive months of decrease since June 2019.
For December, exports decreased by 3.3 per cent to RM257.87 billion and imports dropped by 4.0 per cent to RM221.35 billion. This resulted in a trade surplus of RM36.52 billion, up marginally by 0.6 per cent.