Malaysia’s trade grows at fastest pace in 13 years to RM1.77 trillion

Total reached RM1.77 trillion last year as key-sector exports grew by double digits

MALAYSIA’S total trade grew at its fastest pace in 13 years to reach RM1.77 trillion last year from RM1.49 trillion in 2016, as exports of all key sectors recorded double-digit growth.

International Trade and Industry Minister Datuk Seri Mustapa Mohamed, however, yesterday ruled out another sturdy expansion this year due to a high base effect.

“It’s not realistic to expect a similar performance this year, given the high base. Nonetheless, we believe growth will continue at a modest pace of about five per cent,” he said at a press conference to announce the trade figures yesterday.

Last year’s exports expanded 18.9 per cent to a new high of RM935.39 billion, the strongest since 2005, said Mustapa. Trade surplus widened by 10.3 per cent to RM97.25 billion, the highest surplus since 2012.

Economists commended the performance.

MIDF Amanah Investment Bank Bhd chief economist Dr Kamaruddin Mohd Nor said it was a notable feat with broad-based reflation in global trade fuelling demand for local products.

MIDF Amanah expects exports growth to average 9.3 per cent this year, underpinned by continuous buoyant momentum in global trade activities, further recovery in commodity prices and receding protectionism threat.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the Global Purchasing Managers’ Index for manufacturing continued to remain above the benchmark, suggesting healthy global demand this year.

Consumer sentiments in advanced countries, such as the United States and in European Union, were also very forthcoming, which implied that Malaysia’s external sector continued to be well-supported, he said.

However, Afzanizam said the the ringgit appreciation would have some impact on the export growth this year. Combined with the high base of last year, it would result in moderate growth.

“Overall we can expect export to continue to underpin Malaysia’s economic performance, along with sustained domestic demand growth,” he added.

Meanwhile, Mustapa said 63 per cent of Malaysia’s total exports were to its free-trade agreement (FTA) partners.

Trade with FTA partners expanded 19.9 per cent to RM1.12 trillion, he said, adding that export growth was recorded with all FTA partners, except for Laos.

Exports to Australia surged by 20.8 per cent to RM32.4 billion, South Korea (24.8 per cent to RM28.59 billion), New Zealand (48.6 per cent to RM4.51 billion) and Chile (4.9 per cent to RM714.5 million), he said.

Exports to FTA partners rose 20.2 per cent to RM590.15 billion, representing 63.1 per cent of Malaysia’s 2017 exports and imports grew 19.6 per cent to RM532.57 billion, said Mustapa.

Malaysia is in the process of concluding the Regional Comprehensive Economic Partnership and exploring the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Page B1 pic: International Trade and Industry Minister Datuk Seri Mustapa Mohamed (third from left) with Deputy International Trade and Industry Minister Datuk Seri Ahmad Maslan (second from left), Second International Trade and Industry Minister Datuk Seri Ong Ka Chuan (fourth from left), Malaysia External Trade Development Corp chairman Datuk Dr Noraini Ahmad (fifth from left) and other officials at the 2017 trade performance announcement in Kuala Lumpur yesterday.