Merchandise exports growth softened to 19.3% over the same month last year in September, on the heels of August’s 39.9% jump. The result marked the smallest increase since April. Meanwhile, merchandise imports growth moderated to 22.0% over the same month last year in September (August: +58.1% yoy), marking the weakest reading since April 2022.
As a result, the merchandise trade balance improved from the previous month, recording a USD 7.0 billion surplus in September (August 2022: USD 3.8 billion surplus; September 2021: USD 6.3 billion surplus). Lastly, the trend pointed up, with the 12-month trailing merchandise trade balance recording a USD 61.7 billion surplus in September, compared to the USD 61.0 billion surplus in August.
Commenting on risks to the outlook in 2023, analysts at the EIU stated:
“In 2023 there is a risk that sustained double-digit import growth, combined with a softening of external demand, could result in a marked deterioration in the goods trade balance, which would in turn would depress the value of the local currency, the ringgit. We attach a low risk to this scenario, however, primarily because import demand will slow in line with reduced demand for Malaysia’s electronics and electrical sector in that year. Consequently, we forecast sustained surpluses on the goods trade account, which will provide support to the ringgit.”
FocusEconomics Consensus Forecast panelists project merchandise exports to fall 1.3% and imports to increase 0.5% in 2023, with the trade surplus at USD 51.2 billion.