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UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting assessed the recent figures from the Malaysian export sector.

Key Quotes

“Gross exports fell 4.7% y/y in Mar (Feb: +11.8% y/y), which came in better than our estimate (- 17.0% y/y) and Bloomberg consensus (-9.4% y/y). Gross imports also declined at a smaller-than-expected pace by 2.7% y/y (Feb: +11.3% y/y), resulting in a narrower trade surplus of MYR12.3bn (Feb: +MYR12.6bn). In 1Q20, exports and imports increased 1.1% y/y and 1.3% y/y respectively (4Q19: -3.4% y/y and -3.9% y/y), leaving a trade surplus of MYR37.0bn (4Q19: +MYR36.4bn).”

“The decline in Mar exports was dragged down by almost all major products except for refined petroleum products, transport equipment and rubber products. The weakness in Mar exports was also attributed to sluggish demand from almost all trading partners, with the exception of the ASEAN region.”

“Despite mild improvement in 1Q20 trade numbers, the overall outlook for the next two quarters remains dim with the imposition of movement control order (MCO) in Malaysia from 18 Mar until 12 May being the key deterrent. A more modest global economic recovery post COVID-19 and emerging risks of localisation across the world will pose further downside risks to Malaysia’s export performance ahead. We maintain our 2020 full-year export contraction target at 10.0% for now (2019: -1.7%).”