KUALA LUMPUR, June 5 — Malaysia’s export growth is expected to pick up going forward after recording a trade deficit of RM3.5 billion in April 2020 in line with the government’s decision to allow more industries to resume operations, according to Ambank Research.
The trade deficit in April ended a streak of 269 consecutive months of surplus, with the last recorded trade deficit recorded by the country was in October 1997 amounting to RM151.3 million.
In a note today, the research house said the COVID-19 pandemic, which has caused major disruptions to the global supply chain, has dragged Malaysia to record a trade deficit.
“The poor showing of exports (-23.8 per cent year-on-year (y/y)) and imports, which decreased by 8.0 per cent to RM68.42 billion, is expected as most countries around the world were under some form of lockdown to contain the spread of the pandemic.
“This has caused major disruptions to manufacturing activities and the movement of goods globally,” it said.
Looking ahead, Ambank Research said there are signs that exports will improve partly due to the government having allowed more industries to resume operations with some operating capacity at full capacity since May 4, 2020.
At the same time, it said companies in other countries are also ramping up their business operations.
This is reflected by the improvement in May’s Purchasing Managers’ Index (PMI) which acts as an early indication that the economic downturn caused by the COVID-19 pandemic could start to bottom out, it said.