Published January 8, 2009

Exports slide as Malaysia feels the pinch

Decline across all sectors but November still sees a trade surplus

By S JAYASANKARAN
IN KUALA LUMPUR

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MALAYSIAN exports in November declined by 6 per cent on a year-on-year basis and 3 per cent on a month-on-month basis, indicating that the world financial crisis had begun to bite into the country's real economy.

According to preliminary figures released yesterday by the Ministry of International Trade and Industry, or Miti, total trade (exports plus imports) in November declined 6 per cent from a year ago to RM92 billion (S$38.7 billion). Still, the month saw an overall trade surplus of RM11.5 billion, an amount that the ministry noted was 'the 133rd consecutive month of trade surplus since November 1997'.

The export decline seemed to be across the board with the ministry identifying electrical and electronic (E&E) products followed by refined petroleum products, palm oil, chemicals, crude rubber and iron and steel products as the main culprits. E&E exports, which fell over 10 per cent year-on-year, make up almost 40 per cent of total exports

The economic malaise in the United States was sharply underscored by the figures. Miti said that exports to the United States dropped over 17 per cent year-on-year to RM6.3 billion in November, mainly due to the tapering off in demand for E&E products.

The declining trend in trade is likely to intensify as shrinking global growth crimps both exports and imports amid higher job cuts.

However, Malaysia is likely to post an impressive growth performance in 2008, due to a strong trade performance from January to November. Miti said that total trade in the 11 months jumped 9.2 per cent to RM1.105 trillion from the corresponding period in 2007.

The period saw total exports jumping 12.1 per cent to RM617.4 billion, while imports rose by 6 per cent to RM487.1 billion from the previous year. This resulted in a trade surplus of RM130.3 billion, Miti said.

According to the figures, Singapore, Japan, the United States, China and South Korea were the top five export destinations, accounting for 52.3 per cent of total exports in November.

Meanwhile, the region continued to play an important part in Malaysia's external trade. Countries belonging to the Association of Southeast Asian Nations accounted for 25 per cent of Malaysia's exports and 22 per cent of imports.