KUALA LUMPUR (Sept 18): Malaysia’s stronger-than-expected export performance in August has prompted economists to reassess the country’s external trade outlook, with some raising their full-year growth forecast.
Exports rose 45.5% year-on-year to RM191.05 billion in August, accelerating from July's 38% growth. The latest print exceeded the 38% median forecast in a Bloomberg survey of economists.
The robust performance in August was driven primarily by electrical and electronics (E&E) products, which accounted for nearly half of the total outbound shipments in terms of value. Strong growth in liquefied natural gas (LNG) and petroleum products also contributed to August’s growth.
UOB Global Economics & Markets Research, in a note on Friday, raised its full-year export growth forecast to 31% from 25% previously, after the August gain surpassed its 40% growth forecast.
The research house said the robust export momentum for the last five months is a positive signal indicating strong order books and demand in the E&E segment and higher commodity prices.
The export outlook remained constructive, UOB Research said, as it also flagged potential risks from El Niño, uncertainties surrounding mining production and a possible moderation in inventory building amid tariff-related announcements or concerns over AI-related demand.
It also pointed to four consecutive months of growth in intermediate goods imports as an indication of sustained demand for production inputs, suggesting manufacturers are continuing to replenish inventories and secure materials for current and future orders.
However, UOB Research noted that the 45.5% export growth in August was partly flattered by base effects. On a month-on-month basis, exports fell 1.3% in August, after rising 8.8% in July. Between January and August, exports were up 31.2%, compared with 4.1% growth in the same period last year.
RHB Research, meanwhile, sees a further upside to its 2026 export growth forecast of 21.7%, supported by resilient manufactured exports, particularly E&E, as well as continued strength in commodity exports, notably natural gas.
RHB Research said the outlook remains dependent on the global AI investment cycle, geopolitical developments and US tariff policies. It cautioned that a slowdown in AI-related investment could weigh on semiconductor demand and, in turn, Malaysia’s export performance.
It also remained vigilant to potential spillover effects from geopolitical tensions and crude oil price volatility, which could weigh on global trade by raising transportation and operating costs.
MBSB Research also sees an upside to its 2026 export forecast, currently at 22%. The research house said full-year export growth could exceed its projection if the strong momentum continues, with E&E and technology products expected to remain key drivers of external demand.
MBSB Research, however, expects some moderation towards the end of the year as favourable base effects fade. It also cautioned that the trade outlook remains susceptible to risks such as supply disruptions, elevated input costs, weaker final demand and renewed trade tensions.
Strong exports bolster 3Q GDP prospects
Meanwhile, BIMB Securities Research kept its 2026 export growth forecast unchanged at 23.4% and import growth at 16.5%.
It said the continued strength in external trade raises the prospect of third-quarter gross domestic product (GDP) growth remaining above 5%, subject to domestic demand and production trends.
Malaysia’s second-quarter GDP grew 6.0% year-on-year, accelerating from 5.4% expansion recorded in the first quarter.
In August, imports grew 41.1% year-on-year to RM162.96 billion.
All in all, the trade surplus widened to RM28.09 billion, a 77% year-on-year jump and a 25% month-on-month increase.