Malaysia Trade Outlook Strengthens on Sustained Export Momentum

Malaysia’s exports rose 38% in July, driven by manufacturing and E&E, prompting a higher 2026 export growth forecast despite emerging year-end risks.

Malaysia Trade Momentum Strengthens

Malaysia’s external trade momentum remained strong in July, with exports expanding 38.0% year-on-year, easing from 45.5% in June but exceeding market expectations of 35.0%. Imports also grew firmly by 36.4%, resulting in a wider trade surplus of RM22.5 billion from RM15.8 billion previously.

Manufacturing continued to drive export growth, rising 42.6% year-on-year and contributing 37 percentage points to headline growth. Electrical and electronics exports remained particularly strong, increasing 51.0% amid continued global technology demand and AI-related semiconductor growth. Non-E&E manufacturing also performed well, supported by machinery, equipment and parts.

Commodity exports were mixed. Agriculture exports rebounded 5.6%, helped by stronger palm oil shipments, while mining exports slowed sharply as crude petroleum exports plunged 79.4% and LNG growth moderated.

Exports to key markets remained robust, particularly the US, China and Taiwan, although shipments to Japan, South Korea and several ASEAN markets moderated.

Import trends also point to sustained industrial activity. Intermediate goods imports increased 40.8%, while capital goods imports remained elevated despite slower growth, suggesting healthy investment and order pipelines that could support exports through year-end.

Given robust 7M26 export growth of 29.2%, the forecast for Malaysia’s 2026 export growth has been raised to 26.2% from 16.3%. E&E is expected to remain the main growth engine, while stronger oil and gas and palm oil demand could support commodity exports.

However, front-loaded stockpiling, a high base effect, geopolitical tensions and uncertainty over US trade policy could create headwinds toward year-end.

Source: APEX

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