Malaysian Exports Post Biggest Drop in 15 Years as Demand Ebbs

By Shamim Adam and Michael Munoz, Bloomberg

Malaysia’s exports fell the most in 15 years in January as the Asian economic slowdown worsened amid slumping global demand for electronics and commodities.

Overseas shipments dropped 27.8 percent from a year earlier to 38.3 billion ringgit ($10.3 billion) after slipping 14.9 percent in December, the trade ministry said in a statement in Kuala Lumpur today. The median estimate in a Bloomberg News survey of 16 economists had been for a 22.4 percent decline.

“It seems that there is no end to the onslaught of the global headwinds,” said Joanna Tan, a regional economist at Forecast Pte in Singapore. “Exports are likely to be pressured further in the coming months as the global economy gives little to hope for with regards to growth prospects.”

Malaysia’s economy expanded at the slowest pace in seven years last quarter as a deepening recession in the country’s biggest markets hurt exporters including Malaysian Pacific Industries Bhd. and cost thousands of manufacturing jobs. The central bank has said the collapse in global demand could tilt the nation into an economic contraction this year.

Bank Negara Malaysia last week cut its benchmark interest rate for a third straight meeting to 2 percent, and the government is due to announce a second stimulus plan next week that’s worth at least 10 billion ringgit.

Asia’s export-dependent nations are reeling from the global slowdown, which has slashed demand for the region’s computer chips, cars and commodities. The region is almost twice as reliant on exports as the rest of the world.

Japan, Singapore

Japan’s overseas sales plunged 45.7 percent in January from a year earlier, adding to evidence that Asia’s biggest economy is in its deepest slump in 60 years. Singapore’s shipments fell the most in at least 22 years in January, while Hong Kong’s exports plunged by the most in half a century the same month.

Malaysia’s exports to the U.S. dropped 31.8 percent to 4.8 billion ringgit in January from a year earlier amid a decline in electrical and electronics shipments, the ministry said today.

Shipments of electrical and electronics goods, which made up about 36 percent of total exports in January, slid 33 percent from a year earlier.

Palm oil sales abroad fell 22 percent in January as prices eased from record highs reached earlier last year. Malaysia is Southeast Asia’s second-largest oil and gas producer and the world’s No. 2 palm oil seller.

Imports dropped 32 percent in January to 29.5 billion ringgit, leaving a trade surplus of 8.8 billion ringgit.