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Malaysia recorded largest trade surplus in 23 years despite pandemic, says Azmin
PETALING JAYA: Malaysia’s external trade performance rebounded well at the end of last year, recording a trade surplus for the twenty-third year in a row, with 2020 having the biggest trade surplus during that period, says Senior Minister Datuk Seri Mohamed Azmin Ali (pic).
The International Trade and Industry Minister said, despite major disruptions to global supply chains due to stringent Covid-19 lockdown measures, the positive performance of Malaysia’s external trade performance could be attributed to the progressive opening of the economy and gradual recovery of external demand.
“In fact, exports in December were the highest monthly value recorded for 2020.
“Exports to China recorded a new high in 2020 and similar momentum was reported for (exports to) the United States, which posted the largest value in the last decade. There was significant export growth to the emerging markets notably Costa Rica, Kazakhstan, Kenya, Nigeria, Ghana and Cote d’Ivoire.
“Rubber products, electrical and electronics (E&E) products, as well as palm oil and palm oil-based agriculture products registered strong export expansion.
“Meanwhile, the trade surplus was the highest ever recorded thus maintaining a sustained surplus trend for 23 consecutive years since 1998. Malaysia’s trade performance was in tandem with countries in the region notably Indonesia, Singapore, the Republic of Korea (ROK) and Thailand.
“Malaysia’s trade surplus in 2020 recorded the fourth consecutive year of double-digit growth, with an expansion of 26.9% to RM184.79bil compared to 2019,” he said in a statement issued on Jan 30.
Mohamed Azmin added that this was also the country’s largest trade surplus thus far in that 23-year period.
“Malaysia’s exports in 2020, valued at RM980.99bil, declined marginally by 1.4% compared to the preceding year, in tandem with the unfavourable external environment due to the impact of the Covid-19 pandemic.
“Exports rebounded in the second half of 2020, increasing by 4.8%. This was a significant improvement from a 7.9% contraction in the first half of 2020 as the economy progressively reopened and external demand gradually recovered. Lower exports were recorded to Thailand, India, Bangladesh, Vietnam and Japan while higher exports were registered to China, the United States, Singapore and Hong Kong SAR.
“Total trade in 2020 amounting to RM1.777tril, contracted by 3.6% compared to 2019 while imports totalled RM796.19bil, a decline of 6.3%. Malaysia’s trade performance was in tandem with countries in the region notably Indonesia, Singapore, the ROK and Thailand, ” said Mohamed Azmin.
He further said that the recent signing of the Regional Comprehensive Economic Partnership (RCEP) in Nov 2020 and Moody’s favourable ratings of Malaysia had also bolstered trade with the existing Free Trade Agreement (FTA) partners.
“While trade with existing FTA partners in 2020 stood at RM1.185tril, registering a decrease of 3.7% and accounted for 66.7% of Malaysia’s total trade, the recent signing of the RCEP, the biggest FTA in the world, will provide Malaysian companies and businesses access to more than a third of the world’s market, attract foreign direct investment and will be a boon to our export growth.
“Investor confidence has been bolstered by Moody’s latest affirmation of Malaysia’s local and foreign currency long-term issuer ratings at A3, with a stable outlook.
“This is a testament to the government’s strong fiscal discipline and robust medium-term growth prospects and demonstrates Moody’s confidence in Malaysia as having strong credit standing.
“While these are challenging times, the government’s priority is to place the nation firmly on the path of economic recovery particularly with the 12th Malaysian Plan as the blueprint for sustainable growth founded on sound economic fundamentals and decisive policy measures. This bodes well for greater and more robust trade performance, ” said Mohamed Azmin.
On Friday (Jan 29), the Malaysian Investment Development Authority (MIDA) identified 240 high-profile foreign investment projects in the manufacturing and services sectors with a combined potential investment value of RM81.9bil.
It said these projects were being negotiated and targeted by Malaysia this year while it also expected inflow of foreign direct investments (FDI) into Malaysia to be sustained at pre-Covid-19 level.
“Presently, MIDA has also received and evaluated RM47.7bil worth of potential investments into the country. These projects, once approved, are expected to be implemented within the year 2021 to 2022, ” MIDA said in a statement on Jan 29.
Source: https://www.thestar.com.my/news/nation/2021/01/30/m039sia-recorded-largest-trade-surplus-in-a-row-of-23-years-despite-pandemic-says-azmin