KUALA LUMPUR (Nikkei Markets) - Malaysia's exports in December rose 4.8% on year, helping lift the full year trade surplus to the highest since 2012, provisional data Wednesday showed.
Shipments in December totalled 83.27 billion ringgit ($20.29 billion) compared with 79.48 billion ringgit over the same month in 2017, according to a statement from Ministry of Trade and Industry. For the full year, exports gained 6.7% to 998.01 billion ringgit, exceeding the government's forecast of 4.4% growth.
Despite global challenges, exports may increase 5% this year, International Trade Minister Darrell Leiking told reporters. That compares to the earlier projection of a 3.9% when the government released its annual economic report in November.
Still, Leiking cautioned that external trade in 2019 will be affected by slowing economic growth, potential disruption from U.S.-China tariff tussle and softer commodity prices due to anticipated increase in production and weaker demand.
Malaysia's faster-than-expected growth in exports was in contrast to recent disappointments from China, South Korea, Taiwan, the Philippines and Indonesia. A surprise fall in Singapore's non-oil December exports underscored that Asia's trade engine may be sputtering after two years of heady growth.
Economists said latest global data, including the decline in indicators of manufacturing activities, suggest gloomy prospects ahead for Malaysia's shipments largely driven by re-exports activities.
Malaysia's exports are expected to grow 3.6% this year amid more signs of easing key global indicators, said MIDF Amanah Investment Bank. "The pace is consistent with global commodity prices, expectation of a slight slowdown in overall business performance on top of the uncertainty over Sino-US trade conflict."
Shipments of electrical and electronics goods, which account for more than one-third of Malaysia's total exports, increased 14.2% in December and 11% in 2018. Exports to Malaysia's largest trading partner China rose 10.3% year-on-year in 2018.
Imports gained 1% to 72.84 billion ringgit in December from a year earlier led by higher demand for intermediate and consumption goods. For the full year, imports climbed 4.9% to 877.74 billion ringgit.
Trade surplus in December stood at 10.43 billion ringgit. In 2018 trade surplus widened to 120.27 billion ringgit, up 22% on year.
Malaysia is relying on its resilient domestic demand to power growth at a time when U.S. and China, both major trading partners of the Southeast Asian nation. Trade tensions are beginning to have a material impact on global trade and investments, the central bank flagged last week.
Economic growth rate has decelerated for four straight quarters and expanded 4.4% in July-to-September. Malaysia is expected to release the gross domestic product data for the final quarter of 2018 on Feb. 14.
--Sarah Nadlin Rohim and Jason Ng