PETALING JAYA: Malaysia’s export growth in April beat market expectations, with exports posting a double-digit gain for the ninth consecutive month.
The Statistics Department announced yesterday that exports jumped 20.7% year-on-year (YOY) to RM127.5 billion in April 2022, beating Bloomberg consensus growth forecast of 19.9% .
Chief Statistician Datuk Seri Mohd Uzir Mahidin said the expansion was driven by both domestic exports and re-exports. Domestic exports, valued at RM103.4 billion and contributing 81.1% of total exports, increased by 21.7% year-on-year.
Meanwhile, re-exports recorded RM24.1 billion, increasing by 16.8%. A total of 191 of the 255 product groups exported posted increases in April, compared with the same month a year earlier.
April 2022 export growth was mainly driven by higher shipments of electrical and electronic (E&E) products and commodities such as crude oil, liquefied natural gas, palm oil, palm oil base and manufactured metal products.
In line with export performance, Malaysia’s imports in April 2022 recorded double-digit growth of 22% from RM85.2 billion to RM103.9 billion.
It should be noted that import growth has exceeded export growth for four consecutive months.
The Statistics Department said a total of 176 out of 258 product groups showed positive growth in April 2022.
Meanwhile, the country’s overall trade increased by 21.3%, from RM190.8 billion in the previous year to RM231.4 billion in April 2022.
“Total trade recorded strong double-digit growth for the 15th consecutive month since February 2021.
“The trade balance recorded a surplus of RM23.5 billion, growing by 15.7% in April 2022,” the department said in a statement.
Commenting on the performance, Chief Economist of Bank Islam Malaysia Bhd, Mohd Afzanizam Abdul Rashid, said the double-digit year-on-year export expansion suggested that the weaker ringgit could have benefited Malaysian exporters.
“On average, total exports increased by 21.7% in the first four months of 2022, compared to 29.3% in the same period last year.
“It appears that Malaysia’s external sector has been positive and a weaker ringgit may have helped support growth as export prices have become quite competitive following the depreciation of the ringgit,” he said. -he adds.
In a note released yesterday, UOB Global Economics and Markets Research noted that Malaysia’s export growth of 20.7% year-on-year in April beat its estimate of 19.5%.
“The three export sectors (manufactured goods, agricultural products and mining products) maintained their double-digit annual gains last month. Stronger demand from G3 countries and China, including Hong Kong, has been observed, cushioning a moderation in exports to the Asean region,” he said.
Looking ahead, the research house said it maintained its cautious optimism on Malaysia’s overall trade prospects with an export growth projection of 8% for the current year.
While Malaysia’s trade performance in April was commendable on a yearly basis, the monthly figures (mom) raised concerns about the outlook.
With exports declining faster than falling imports, Malaysia’s trade surplus in April narrowed significantly on a monthly basis.
For a trade-dependent country like Malaysia, where the value of trade was equivalent to 116% of its gross domestic product in 2020, a contraction in exports, imports and the trade surplus has raised doubts about the country’s economic recovery. .
Compared with March 2022, Malaysia’s trade surplus in April shrunk by 11.6% m/m, after exports and imports fell by 3.1% m/m and 0.9% respectively month-over-month last month.
Meanwhile, the country’s total trade also fell 2.1% from March.
Speaking to StarBiz, Geoffrey Williams, a professor at the University of Science and Technology Malaysia, warned that the contractions could get worse in the future.
This takes into account that all major markets such as China, Europe and the United States have lowered their growth forecasts for 2022.
With slower economic growth in these markets, which are also Malaysia’s main export destinations, Malaysia’s export sales would be affected, according to Williams.
“There are concerns about net exports which, according to Bank Negara, fell by 26.5% in the first quarter of 2022 compared to the previous year.
“The contribution to growth was negative at 1.5%. So it shows that we cannot depend as much on trade to contribute to overall growth as in the official forecast,” he said.
However, Bank Islam’s Mohd Afzanizam disagreed with Williams. He said the contraction was no cause for concern.
“Historically, the performance of moms for April has been smaller or contracting.
“I would say it could be a feature of seasonal factors,” he told StarBiz.
For the month of April from 2015 to 2018, exports contracted steadily, according to Mohd Afzanizam.
In April 2019, exports edged up by 0.6% m/m and contracted again by 19.1% m/m in April 2020 due to the closure of international borders following the ban. movement control.
In April 2021, exports rebounded slightly by 0.6% month on month.
Looking ahead, Williams said net exports would not be a key support for Malaysia’s growth, even with the depreciation of the ringgit.
“We can only hope they don’t drag on too much.
“The weaker ringgit makes exports cheaper but also makes imports more expensive. So it’s a balanced situation,” he added.