KUALA LUMPUR: The unlikely rebound in Chinese demand will continue to weigh on Malaysia’s export performance this year, but a possible recovery in commodity prices over the next few months may provide some relief.
BIMB Securities Research expects the Malaysian economy to stagnate this year, but is optimistic that commodity prices could recover in the next few months, helping the country’s exports.
“The still fragile growth outlook in advanced economies, coupled with downside growth risks from emerging markets, imply further uptick in global demand and hence exports could be very modest.
“We however remain hopeful of positive exports growth in the next few months, taking cue from a lower base for oil prices and not forgetting positive lift from the ringgit weakness,” it said in a report.
Malaysia’s trade balance dipped to RM8bil in December from a RM12.2bil high in October, partly due to the slowdown in China’s economy.
Export value increased by only 1.4% year-on-year to RM68.3bil in December, compared with a 6.3% increase in November, while imports increased by 3.2% to RM60.3bil after growing 9.1% the previous month.
As a result, the trade surplus for December fell RM916.2mil or 10.3% to RM8bil.
Month-on-month, exports saw a 1% growth from RM67.6bil, while imports rose RM2.9bil or 5.1% from RM57.4bil. In seasonally adjusted terms, however, exports fell 2.2% while imports dropped 2.9%.
The research house said Malaysia’s export growth had largely been affected by slower shipments of oil products. “December’s exports earnings figures again showed sluggish earnings from liquefied natural gas (LNG), reflecting the trend from November’s data, while electronics and electrical products – Malaysia’s mainstay exports – showed positive growth,” it said.
Overall, it said, growth in exports was attributed to electrical and electronic (E&E) products, which accounted for 36.3% of total exports, and timber and timber-based products, which contributed 2.9% of total exports.
Exports of mining goods, however, saw declines, with LNG, which contributed 5.6% to total exports falling 36.7% or RM2.2bil to RM3.8bil due to the decrease in both average unit value and export volume.
Refined petroleum products also fell 34.4% or RM1.5bil to RM2.8bil.
Exports were also dragged down by palm oil and palm-based products, which dropped 7.0% to RM5.1bil.
For the year 2015, Malaysia’s total trade grew by 1.2% to RM1.47 trillion compared with RM1.45 trillion the previous year, supported by stronger growth of 5.1% in the second half.
Exports grew by 1.9% despite a challenging economic environment to reach RM779.95bil, while imports grew by a marginal by 0.4% or RM2.71bil to RM685.65bil.
