Malaysian Exports Decline 1.1% in May This Year

Malaysia’s exports fell in May this year for the first time this year amid sharp decline in shipments of petroleum products and lower deliveries to China and Japan, data from the Ministry of Investment, Trade and Industry showed on Friday.

The decline overshadowed continued surge of exports to the US amid a 90-day pause on a sweeping set of steep tariffs. All in all, exports slipped 1.1% year-on-year and 5.2% month-on-month to $29.75 billion, Miti said.

Malaysia stands to benefit “significantly” from expansion in global semiconductor sales despite uncertainties in global economic conditions. While the sector’s outlook remains positive, proactive policy responses will be crucial to sustain this growth momentum,” the ministry said.

Shipments of electrical and electronics (E&E) products — which made up over 42.4% of total exports — rose 7% y-o-y in May followed by a 16.4% increase in exports of machinery, equipment, and parts. However, exports of petroleum products fell nearly 30%.

In terms of markets, deliveries to Malaysia’s largest trading partner China fell 4.3% in May when compared with the same month last year, due to lower exports of liquefied natural gas, metal and paper products.

Exports to US Up

Exports to the US were up 16%, the eighth consecutive month of double-digit growth, driven by electronics and processed food as well as machinery, equipment and parts. Meanwhile, gross imports climbed 6.6% y-o-y to $29.58 billion, lifted by higher inbound shipments of E&E products and machinery-related goods.

Capital goods imports surged 63.7%, mainly due to increased purchases of non-transport capital goods. Imports of intermediate goods, components and materials used in the final assembly of products such as cars and computers, fell 4.4% due to primary fuels and lubricants.

Imports of consumption goods dipped 1.1% from softer demand for primary food and beverages for household consumption. On a m-o-m basis, total imports were down 2%.

The decline in exports, coupled with the rise in imports, sharply narrowed the trade surplus in May to $180.7 million in May. Trade surplus was down 92.3% on a y-o-y basis and shrank 85.2% month-on-month, Miti said.

Growth in April

Miti also said that the country’s exports grew 16.4% y-o-y to $31.39 billion in April. The growth in exports was predominantly driven by robust demand for manufactured goods, particularly electrical and electronic (E&E) products, which increased by almost $3.76 billion.

“Another equally important sector was agriculture goods, especially palm oil and palm oil-based agriculture products which also played a significant role in supporting the overall expansion in exports,” the Ministry said.

On the other hand, an increase in imports for the month saw the value of inbound shipments rising 20% to $30.17 billion. Malaysia’s overall trade value was 18.2% higher y-o-y at $61.55 billion. A trade surplus of $1.22 billion was recorded, marking a 60^th consecutive month of trade surplus since May 2020, Miti added.