Trade war bites as Malaysian export growth slows in 2019
KUALA LUMPUR: The ongoing trade war between the US and China has had its impact felt in Malaysia by way of slowing exports to 3.1 per cent year on year (y-o-y) in January 2019, from a revised 5.1 per cent in December 2018.
“As expected, trade momentum slowed further in early 2019 due to uncertainties over the “tit-fortat” US-China trade war. This was seen in export growth in US dollar terms, which slipped into its first decline in more than two years,” highlighted RHB Research Institute Sdn Bhd (RHB Research) economist Vincent Loo.
“Moreover, importers holding back on capital outlays is another indicator of weaker exports in the months ahead.”
RHB Research in its review yesterday said electric and electronics (E&E) exports eased to a growth of 8.2 per cent y-o-y in January after it rebounded to 14.2 per cent in December, as frontloading activities halted after the US and China agreed to hold off further tariff hikes pending negotiations.
As it stands, exports of electrical machinery and apparatus – mostly semiconductors – slowed, while office machines and data processing equipment (mostly PCs) suffered a sharper decline.
“Likewise, non-E&E exports fell by a further 1.8 per cent y-oy, after declining 0.4 per cent in December, on the back of declines in the exports of refined petroleum and machinery and equipment.
“On the contrary, commodity exports rebounded into a growth of 7.2 per cent y-o-y in January, after falling 0.4 per cent in December, as liquefied natural gas (LNG) export growth recovered strongly after dipping in the previous month while palm oil shipments declined at a slower pace.