Malaysia: Trade surplus climbs to record high – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting review the latest trade balance figures in Malaysia.

Key Takeaways

“Malaysia recorded the biggest ever trade surplus of MYR31.7bn in Sep (Aug: +MYR17.0bn) as exports continued to post strong double-digit growth of 30.1% y/y (Aug: +48.1%) while import growth more than halved to 33.0% (from +67.3% in Aug). The latest export reading came in above our estimate (+29.0%) but below Bloomberg consensus (+31.5%), largely underpinned by higher shipments of electrical & electronics (E&E) and oil & gas products with strong global energy prices lending further support.”

“In 3Q22, exports surged 38.3% y/y (2Q22: +29.9%) while imports jumped 46.5% (2Q22: +36.0%), leaving a cumulative trade surplus of MYR64.3bn during the quarter (2Q22: +MYR58.0bn). A 10.8% q/q gain in trade surplus implies a wider current account surplus for 3Q22, which we estimate at MYR7.5bn (2Q22: +MYR4.4bn).”

“Given that exports averaged 30.3% year-to-date as of Sep and risks to the trade outlook continue to tilt towards the downside, we maintain our export growth projection at 26.0% for 2022 (MOF est: +17.4%, 2021: +26.1%) and 1.5% for 2023 (MOF est: +2.2%). Rising global recession risk and global tech downcycle are key deterrents to trade growth momentum while statistical base and commodity price effects are wildcards for the outlook going into 2023.”