Malaysia posts highest trade surplus in 9 years

KUALA LUMPUR: Malaysia posted a first-quarter trade surplus of RM36.99 billion —its highest in nine years — but economists warn that the country’s performance in the second quarter will likely be in the negative.

Malaysia’s trade grew 1.2 per cent to RM440.38 billion year-onyear in the first quarter, said the International Trade and Industry Ministry yesterday.

Total exports increased 1.1 per cent to RM238.68 billion while imports rose 1.3 per cent to RM201.69 billion in the first quarter compared with the same period last year.

But compared with the preceding quarter, total trade, exports and imports contracted 8.1, 7.4 and 8.9 per cent, respectively.

Higher trade was recorded with Indonesia, the United States, South Korea, Saudi Arabia and Singapore, said the ministry.

Economists said the trade performance would be different in the second quarter due to disruption of supply chains, social distancing policy, production stoppages, slowdown in foreign direct investment and rise in trade protectionism.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said the base was low last year while the effects of the Movement Control Order (MCO) were only felt in the middle of March.

“Therefore, the supply side shock was deemed minimal.”

He expects the second-quarter trade performance to be negative as the effects of the MCO would be felt last month, this month and perhaps next month.

“External demand is weak, too. So we are seeing supply and demand shock working full blast in the June quarter.”

Putra Business School business development manager Assoc Prof Dr Ahmed Razman Abdul Latiff expects the second-quarter performance to be on a downtrend.

He said most of the growth in export value happened in January and February before the MCO took effect on March 18.