UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting comment on the latest Exports data in Malaysia.

Key Takeaways

“Gross export growth strengthened to 25.4% y/y in Mar (from +16.8% in Feb), higher than our estimate (9.0%) and Bloomberg consensus (10.4%). Gross import growth also accelerated to 29.9% y/y (from +18.3% in Feb). This brought the trade surplus to MYR26.7bn (from +MYR19.8bn in Feb).”

“Exports were lifted by robust growth for electrical & electronics and commodity-based products in particular palm oil, palm-oil based products, petroleum products, LNG, and crude petroleum.  In 1Q22, exports gained 22.2% (4Q21: +29.0%) while imports advanced 25.2% (4Q21: +29.6%). Higher imports over exports led to a narrower trade surplus of MYR65.1bn (4Q21: +MYR76.2bn) which we expect to translate into a current account surplus of MYR16.0bn in 1Q22 (4Q21: +MYR15.2bn).”

“Given the export strength to date, we have raised our full-year export growth forecast to 8.0% (from 2.0% previously; BNM est: +10.9%; 2021: +26.0%) albeit mindful of prevailing risks from geopolitical risks, China’s zero-COVID policy, ongoing supply chain disruptions, and tighter global financial conditions. The risk of second order impact on Malaysia from the Russia-Ukraine conflict has emerged following the expansion of sanctions on Russia and potential escalation of Ukraine conflict.”