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UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting evaluate the recently released exports data in the Malaysian economy.

Key Quotes

“Exports rose for the fifth month by 6.6% y/y in Jan 2021 (Dec 2020: +10.8%) but undershot our estimate (+8.0%) and Bloomberg consensus (+7.1%). Imports also gained further by 1.3% y/y (Dec: +1.6%), resulting in a narrower trade surplus of MYR16.6bn (Dec: +MYR20.7bn).”

“Jan’s export growth was solely driven by strong shipments of manufactured goods (Jan: +11.7%; Dec: +12.4%) particularly rubber products, E&E products, chemicals & chemical products, manufactures of metal, and optical & scientific equipment. This fully offset the weakness in both mining (Jan: -31.0%; Dec: -31.0%) and agriculture (Jan: -7.2%; Dec: +47.1%) exports. Robust demand was particularly coming from China, US, EU, Singapore, Hong Kong, and Vietnam.”

“Despite Malaysia reinstating Movement Control Order (2.0) in mid-Jan, it still managed to clinch the highest export value for the month of Jan on record. This further affirms our view that the export sector remains on track to recover in tandem with the global economy. The nation’s diversified export base and robust trade linkages also play an important role in sustaining the revival of the sector amid lingering uncertainties surrounding COVID-19 pandemic. We reiterate our export growth forecast of +4.0% for 2021 (2020: -1.4%).”

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