Economy Out of the woods: Malaysia’s export is in full cylinder

by **Cals** Fri 07 Feb 2014, 15:49

Economy Out of the woods: Malaysia’s export is in full cylinder

Business & Markets 2014

Written by Rosnani Rasul of M & A Securities Research

Friday, 07 February 2014 14:02

KUALA LUMPUR (Feb 7): Malaysia’s export performance has finally normalized after clocking in a full year growth of 2.4% year-on-year (y-o-y) in 2013 higher than Ministry’s of Finance full year expectation of 1.2% growth and ahead of Bank Negara Malaysia’s projection of 1.4%.
It will be a good full year report card for Malaysia as next week’s 2013 GDP release (12^th February) is likely to hit 5%, at the upper of the central bank’s forecast.
The final month of the year (i.e. December) export growth came in at a blazing pace of 14.4% y-o-y, the second highest of the year and thumping squarely consensus expectation of 6% growth.
As mentioned previously, the weakness of Ringgit has to a large extent helped in lifting Malaysia’s export growth especially in the last quarter of the year.
The steady economic recovery of major advanced countries also helped to shore up demand for our goods.
China emerged as Malaysia’s largest trading partner for 5 consecutive years in 2013. Gloing forward, the steady economic recovery of the US will be a boon for Malaysia as the US will in turn import a lot of goods from China and China in turn will increase its import from Malaysia.
Added with the rising of import of the US from Malaysia, it can be surmised that Malaysia’s export momentum is finally out of the woods and moving ahead with a vengeance.
December’s import, nonetheless, vaulted strongly by 14.8% y-o-y (November: 6.4%) lifting full year import growth to 7% y-o-y.
Overall, Malaysia registered admirable trade surplus of RM70.6 billion for the full year against RM94.8 billion the year before.
Although trade surplus was lower y-o-y but it is no small feat as Malaysia’s suffered export contraction for 5 out of 12 months last year.
Given the challenging external environment in 2013, Malaysia did pretty well especially in restructuring its export destination with the aim to avert prolong pressure in export growth.