KUALA LUMPUR (Feb 20): Economists were surprised by the stronger-than-expected export growth Malaysia staged in January, but remain mixed on how it will fare in the remainder of the year.
Exports grew 19.6% year-on-year in January, exceeding Bloomberg’s consensus of 14.3%, driven by sustained strong demand for electrical and electronics (E&E) products, according to economists.
The outperformance partly reflected a low base as well as possible front-loading ahead of the festive season in February, UOB said in a note on Friday.
Though exports started the year firm, with its strongest growth since September 2022, the picture for the remainder of the year remains unclear, given uncertainties are still rife.
UOB, together with MBSB Research, sees export growth moderating in 2026, from 2025’s 6.5%, with US tariff overhangs and heightened geopolitical tension continuing to cloud business sentiment.
MBSB is more optimistic, expecting export growth to moderate to 4.5% this year, while UOB currently pegs a heftier slowdown to 2.5%.
On the other hand, RHB Research anticipates export growth to accelerate in 2026 to 9.3%.
The strong momentum recorded in January, which the house sees as helped by strengthened trade and manufacturing momentum on the back of the US-Malaysia reciprocal trade agreement, is expected to continue, it noted.
E&E exports, in particular, are expected to maintain its growth momentum in 2026, RHB said, driven by continued global demand for semiconductor components and consumer electronics.
Despite its sanguine view, RHB said it recognises various downside risks.
Potential demand slowdowns in the European Union and China — two of Malaysia’s major trading partners — could weigh on external demand, while additional risks also come from US trade policy and evolving regional trade dynamics, it added.