Malaysia's total trade grew 1.5% in 2016

February 8, 2017 | By | Reply More

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KUALA LUMPUR: Malaysia is forecasting a modest growth of 2.7 per cent in total trade for 2017, Minister of International Trade and Industry Mustapa Mohamed said on Wednesday (Feb 8).

For 2016, Malaysia’s total trade grew by 1.5 per cent to reach RM1.49 trillion (US$340 billion) compared to RM1.46 trillion in the previous year. 

Speaking to the media after a conference unveiling Malaysia’s trade performance for 2016, he added that the he expects the nation’s exports to grow by 3 per cent this year, bolstered by improved commodity prices and a recovery in global economies. 

According to Mustapa, exports in 2016 rose rose by 1.1 per cent to RM785.93 billion and imports grew by 1.9 per cent to RM698.66 billion, resulting in a trade surplus of RM87.27 billion, the 19th consecutive year of trade surplus since 1998.

Mustapa said ASEAN’s share of Malaysia’s total exports expanded to 29.4 per cent in 2016 from 28.2 per cent in 2015, the highest share since 1993.

“Specifically in December 2016, Malaysia’s total trade recorded a double-digit growth of 11.1 per cent to RM142.39 billion compared with a year ago,” he said.

He said exports in December 2016 expanded by 10.7 per cent year-on-year to RM75.55 billion, the highest value in 2016 with manufactured goods continued to support Malaysia’s exports.

ASEAN AN IMPORTANT STRATEGIC AND TRADING PARTNER

Explaining in details, he said, the increase in total trade in 2016 was contributed by higher trade with China, which expanded by RM10.09 billion, United States (RM6.87 billion), South Korea (RM3.56 billion), Taiwan (RM3.29 billion) and Saudi Arabia (RM3.04 billion).

The minister said significant increases were also recorded with Turkey amounting to RM2.81 billion, Hong Kong (RM1.93 billion), India (RM1.85 billion), Mexico (RM1.64 billion), Brazil (RM1.52 billion), Bangladesh (RM1.48 billion), ASEAN (RM1.41 billion) and the European Union (EU) (RM549.6 million).

He said the major contributors to export growth in 2016 were expansion of manufactured and agricultural exports by 3.2 per cent and 4.7 per cent, respectively, compensating for the lower performance of mining goods.

The continued growth for electrical and electronics (E & E) exports were driven by strong global demand for electronic devices and rising exports to ASEAN by 5.4 per cent with significant growth to Singapore, Cambodia, Laos, Myanmar and Vietnam. The Philippines also spurred exports.

Mustapa said ASEAN remained as an important and strategic trading partner for Malaysia, taking up RM230.93 billion of Malaysia’s exports in 2016, an increase of 5.4 per cent.

In terms of trade, ASEAN accounted for 27.1 per cent of Malaysia’s total trade in 2016, with a value of RM402.66 billion, an increase of 0.4 per cent, he said.

Mustapa said the increase in exports was led by manufactured goods which expanded by RM12.97bil or 6.7 per cent.

The exports of manufactured goods accounted for 89.1 per cent in 2016 compared with 87.9 per cent in 2015, he said.

“The expansion in this sector was contributed by higher exports of E & E products, petroleum products, manufactures of metal, processed food, transport equipment, chemicals and chemical products, machinery, equipment and parts as well as textiles,” he said.

Among the ASEAN countries, Singapore remained the largest export market with a share of 49.6 per cent of total exports to ASEAN.  

It was also unveiled in the conference that China remained as Malaysia’s largest trading partner for the eighth consecutive year. Bilateral trade between the two countries increased by 4.4 per cent to RM241 billion in 2016.  

ACTIVELY PURSUING BILATERAL TRADE PACTS WITH REGIONAL COUNTRIES 

Despite US’ withdrawal from the Trans-Pacific Partnership Agreement, Mustapa said that all is not lost and that Malaysia is amending laws to adopt some better practices.

“We are on course course to amending those laws, we believe its in the best interest of Malaysia to adopt some international best practices in respect of labour environment and governance.”

Mustapa added the countries in the region should focus on concluding the Regional Comprehensive Economic Partnership (RCEP) talks by the end of 2017 .

Apart from that, Malaysia is also actively pursuing bilateral trade pacts with regional countries which includes expanding intra-ASEAN trade to 35 per cent from the current 29 per cent.

“Countries in ASEAN work harder in reducing non tariff barriers in a more serious manner,” Mustapa said.
“The feedback we are getting is that there is a lot of rhetoric when it comes to nuts and bolts and situation on the ground. We haven’t seen much although there’s been some progress.”

He added that Malaysia will be emphasising on the RCEP when ASEAN economic ministers meet in Manila on Mar 8 to 10. 

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