Malaysia’s trade surplus hits record high in 2022, growth expected at ‘softer pace’ this year

KUALA LUMPUR: Malaysia’s trade surplus hit a record high of RM255.1 billion (US$59.09 billion) last year, International Trade and Industry Minister Tengku Zafrul Tengku Abdul Aziz said on Wednesday (Jan 18).

This is the 25th consecutive year the country has recorded a trade surplus since 1998. A trade surplus occurs when the value of a country’s exports exceeds the costs of its imports.

The Ministry of International Trade and Industry (MITI), however, has warned that the country’s trade performance is expected to grow “at a softer pace” this year.

According to Tengku Zafrul, Malaysia’ trade performance registered its fastest growth last year since 1994, surpassing the RM2 trillion mark for the second consecutive year.

Data from MITI showed that exports expanded by 25 per cent to RM1.55 trillion while imports jumped by 31.3 per cent to RM1.29 trillion.

“In 2022, Malaysia’s trade continued to demonstrate a remarkable performance and registered another record-breaking achievement with trade, exports, imports, and trade surplus soaring to a new high.

“This is a positive reflection that the nation’s trade performance is on an upward trajectory, boosted by higher external demand and strong commodity prices.” Tengku Zafrul said in a statement.

Trade with the Association of Southeast Asian Nations (ASEAN) accounted for 27.1 per cent of Malaysia’s total trade last year.

Aside from ASEAN, the top five trading partners for Malaysia in 2022 were China, US, the European Union (EU) and Japan.

According to Tengku Zafrul, the five trading partners represented over 67 per cent of the country’s total trade. He added that they also contributed 68 per cent to Malaysia’s total exports last year.

Data from MITI showed that Singapore accounted for the largest value of exports among ASEAN nations at RM232.57 billion. This is then followed by Thailand, Indonesia, Vietnam and the Philippines.

“Singapore, Thailand and Indonesia were the top three export destinations in 2022, accounting for 78.3 per cent of Malaysia’s total exports to ASEAN. Exports to almost all ASEAN countries registered a new record high,” said MITI.

ASEAN, China, Taiwan, US and the EU were Malaysia’s major import sources, making up close to 69 per cent of the country’s total imports.

According to MITI, China remained as the largest import source since 2011, followed by Singapore, Taiwan, US and Japan.

“These markets contributed 54.1 per cent to Malaysia’s total imports,” the ministry said.

MITI, however, warned that the country’s trade performance is expected to “grow at a softer pace” this year in line with the overall global outlook for the year.

“This is in tandem with the outlook by (the) World Trade Organisation which anticipated global trade to grow by 1 per cent,” it said.

The ministry said that the country’s trade is expected to grow by 1.3 per cent while exports and imports are estimated to increase by 2.2 per cent and 0.2 per cent respectively.

MITI said: “This was due to global uncertainties arising from inflationary pressures, prolonged geopolitical tensions, exporters’ capacity in meeting environmental, social and governance (ESG) market demands, disruption in global supply chains and volatility in commodity prices.”

On Tuesday, Prime Minister Anwar Ibrahim said that Malaysia’s national debt has reached RM1.5 trillion, and immediate action must be taken to address the issue.

He was quoted as saying by local media that the figure - which includes liabilities - has already exceeded 80 per cent of the country’s gross domestic product and that this has a direct impact on the economy.

The figure also suggests that Malaysia’s budget deficit will widen further than earlier estimated.

Mr Anwar was also quoted as saying by national news agency Bernama that the economy is still “considered weak”.