KUALA LUMPUR: Malaysia’s total trade in 2022 continues to post stellar performance with trade, exports, imports and trade surplus soaring to an all-time high.
Trade rose by 27.8% to RM2.85 trillion last year, surpassing the RM2 trillion-mark for the second consecutive year and registered the fastest growth since 1994, said International Trade and Industry Minister (Miti) Tengku Datuk Seri Zafrul Abdul Aziz,
Exports for the year under review also rose by 25% year-on-year (y-o-y) to RM1.55 trillion, which exceeded the 12th Malaysia Plan projections for 2025 – three years ahead of the target, he said in a statement yesterday.
Imports surpassed RM1 trillion mark for the first time, up by 31.3% to RM1.3 trillion while trade surplus rose by 0.6% y-o-y to RM255bil respectively.
“This is a positive reflection that the nation’s trade performance is on an upward trajectory, boosted by higher external demand and strong commodity prices,” he pointed out.
However, Tengku Zafrul cautioned that Malaysia’s trade performance is expected to grow at a softer pace this year in tandem with the outlook by World Trade Organisation which anticipated global trade to grow by 1%.
Malaysia’s trade is expected to grow by 1.3% while exports and imports are estimated to increase by 2.2% and 0.2% respectively, according to the Finance Ministry in its Economic Outlook 2023.
Meanwhile, Miti noted that the significant rise in exports was driven by robust exports of electrical and electronics (E&E), petroleum products, liqueified natural gas (LNG), palm oil and palm oil-based agriculture products, crude petroleum as well as machinery, equipment and parts, which each posted more than RM10bil increase or a double-digit growth.
“All the products recorded the highest export value ever except for crude petroleum.
“While exports to major trading partners notably Asean, China, the United States, the European Union and Japan registered a new record,” it added.
Trade with Asean rose by 34% to RM772bil, which accounted for 27.1% of Malaysia’s total trade in 2022.
Exports to Asean constituted 29.2% of the country’s total exports, posting the highest value at RM452.9bil, an increase of 31.8% from a year ago.
Similarly, he highlighted that exports to free trade agreement partners registered the highest value so far, while exports to markets under the Regional Comprehensive Economic Partnership agreement, which came into force last year, had posted double-digit expansion.
Tengku Zafrul explained that Malaysia’s solid trade performance was in line with countries in Asia, notably Taiwan and South Korea following steady global demand.
China also remained Malaysia’s largest trading partner last year, which added up to 14 consecutive years of 17.1% share of Malaysia’s total trade.
This has expanded by 15.6% y-o-y to RM487bil compared with 2021.
According to Miti, exports to China surpassed the RM200bil-mark for the first time, growing 9.4% y-o-y to RM210.62bil, which was the highest value ever recorded.
The expansion in exports to China was driven by strong exports of E&E, LNG as well as palm oil and palm oil-based agriculture products.
China is also Malaysia’s largest import source, accounting for 21.3% of total imports.
It has climbed by 20.7% y-o-y to RM277bil in 2022 with main imports such as E&E, machinery, equipment and parts as well as chemicals and chemical products, Miti said.
Malaysia’s exports to the United States in 2022 also rose to a record high by 17.5% y-o-y to RM167.16bil.
The expansion is supported mainly by the strong exports of manufactured goods, which increased by 18% y-o-y to RM164.43bil and this segment accounted for 98.4% of Malaysia’s total exports to the United States, according to Miti.
The ministry noted that imports from the United States expanded by 34.4% y-o-y to RM100.42bil, comprising mainly E&E, transport equipment as well as machinery, equipment and parts.
Commenting on the trade figures, Sunway University professor of economics Dr Yeah Kim Leng told StarBiz that the strong performance reflected Malaysia’s diversified exports which had enabled it to sustain the export recovery last year.
“The robust finish, which is stronger-than-expected as in the year-end will give momentum for exports going into new year and this will help the export sector brace for the global output and trade slowdown that is likely to be very pronounced this year.
“Exporters with strong earnings last year will also be in a better position to brace for a slowdown this year,” Yeah pointed out.
Meanwhile, Socio-Economic Research Centre executive director Lee Heng Guie said the export numbers were coming off a high base in 2021 and 2022.
Lee said exports would continue to normalise this year and the country would have to brace for this slowing momentum.
“December’s export growth moderated to 6% y-o-y which indicated that it had started to slow.
“For the past few months, this was at double digits – indicating a weakening global demand and moderating demand from the E&E sector especially,” Lee said.
“There will also likely be lower demand for manufactured goods and the commodity prices may also fall.
“As exports are expected to slow this year, the growth driver will need to come from domestic demand.
“Exports will move from being supportive to growth to dragging growth lower this year.
“Export growth may even be negative y-o-y on some months this year, therefore we need to be ready for this,” he added Lee.
