Malaysia's exports down 27.8%

Malaysia's exports down 27.8% in January

Posted: 06 March 2009 1435 hrs KUALA LUMPUR:

Malaysia's January exports plunged 27.8 per cent year-on-year, hitting their lowest level since 2001 amid falling demand from key trading partners, according to official data released Friday. The trade ministry said in a statement that exports fell to 38.3 billion ringgit (US$10.28 billion) from a year ago while imports slumped 32 per cent year-on-year in January.

The total trade was worth 67.77 billion ringgit, a decrease of 29.7 per cent from a year ago, but Malaysia did manage to record a trade surplus of 8.83 billion ringgit for the month. Ratings agency RAM Holdings chief economist Yeah Kim Leng said the decline in exports was the sharpest drop in eight years. “This is the worst since the 25 per cent decline in the exports for electrical and electronic products in 2001 during the global IT slump," he told AFP.

“The sharp contraction is the result from both a sharp drop in demand and lower prices. Malaysia is now feeling the brunt of the global slump in exports," he said. The trade ministry said the sharp fall in exports was mostly due to lower demand for electrical and electronic products, which account for one-third of Malaysia's total exports to key markets in China, Japan, Europe and the United States.

In December, Malaysian exports slumped 14.9 per cent, compared with just 4.9 per cent in November. On Wednesday, an influential think tank said Malaysia was on the brink of a recession as falling demand hits exports and manufacturing with growth expected to reach just 0.5 per cent for the year.

The Malaysian Institute of Economic Research (MIER) had in January already slashed its growth forecast to 1.3 per cent from an earlier 3.4 per cent, while the government is sticking to its figure of 3.5 per cent growth for 2009. Official data released last week showed Malaysia's economic growth slowed to just 0.1 per cent in the fourth quarter of 2008, hit by falling exports and manufacturing as demand continues to evaporate.