Malaysia's total trade to grow 2.7% this year

KUALA LUMPUR: Malaysia’s total trade is expected to grow 2.7% this year, in line with global growth, said International Trade and Industry Minister Datuk Seri Mustapa Mohamed.
“That is in line with the current thinking that there will be a slight recovery in world growth and following that, there will be some boost to global trade,” he told reporters at a briefing on Malaysia’s 2016 trade performance yesterday.
He said exports are expected to grow 3% and imports 2% this year.
“Malaysia continues to import products and we’ve been hoping for some import substitution for example, we produce some steel in Malaysia and there’s going to be quite a few construction projects this year.
“We have been talking to CIDB and some companies to see the possibility of them increasing the use of local materials. We know that some items of course have to be imported but where the raw materials are available locally, we would like to see the use of more Malaysian raw materials,” he added.
Last year, Malaysia’s total trade grew 1.5% to RM1.485 trillion from RM1.463 trillion in 2015. Exports rose 1.1% to RM785.93 billion while imports rose 1.9% to RM698.66 billion last year, resulting in a trade surplus of RM87.27 billion.
Mustapa explained the rate of growth last year was modest due to lower global growth, softening of China’s economy and weaker commodity prices.
The increase in total trade was contributed by higher trade with China, which expanded by RM10.09 billion followed by trade with the US (+RM6.87 billion) and South Korea (+RM3.56 billion).
Significant increases were also recorded with Turkey (+RM2.81 billion) and Hong Kong (+ RM1.93 billion), while trade with Asean countries and European Union expanded by RM1.41 billion and RM549.6 million respectively.
Asean absorbed 29.4% of exports last year with exports to Asean countries rising 5.4% to RM230.93 billion. In terms of trade, Asean accounted for 27.1% of Malaysia’s total trade with a value of RM402.66 billion.
Singapore remained the largest export market, absorbing 49.6% of total exports to Asean. Exports to Singapore rose 5.6% to RM114.44 billion.
Meanwhile, China was Malaysia’s largest trading partner for the eighth consecutive year since 2009 and Mustapa said this will continue in 2017. Last year, trade with China rose 4.4% to RM240.91 billion.
Trade with the EU rose marginally to RM149.05 billion last year and trade with the US rose 5.3% to RM135.88 billion. However, trade with Japan fell 4.8% to RM120.26 billion.
In terms of exports, manufactured goods dominated with 3.2% growth to RM645.67 billion, accounting for 82.2% of total exports compared with 80.5% in 2015. Exports in electrical and electronic products rose 3.5% to RM287.72 billion, accounting for 36.6% of total exports.
On the Trans-Pacific Partnership Agreement (TPPA), Mustapa said he will not be attending the summit in Chile next month but will be represented by the Malaysian ambassador.
He said he has been exchanging information on a regular basis with other members in the TPPA and discussions are underway about the options moving forward, including moving ahead without the US, and bilateral trade.
He said Malaysia is on course in amending its laws whether or not TPPA moves ahead, as it is in Malaysia’s best interest to adopt international best practices, particularly in terms of labour, environment and governance.