PETALING JAYA: An MP says the country’s “highest ever” trade surplus achieved last year is nothing to be proud of as it is a result of a very weak domestic economy.
Bangi MP Ong Kian Ming also said the domestic economy is likely to remain lacklustre this year.
Previously, senior minister for economy Mohamed Azmin Ali said Malaysia achieved its highest ever trade surplus last year in a statement of the country’s external trade statistics.
The trade surplus grew by 26.9% from RM145.7 billion in 2019 to RM184.8 in 2020.
Ong, the former deputy international trade and industry minister, said that last year, Malaysia’s total exports actually decreased by 1.4% or RM14.1 billion compared with 2019.
“The main reason why Malaysia was able to increase its trade surplus is because total imports experienced a large decrease of 6.3% or RM53.2 billion from RM849 billion in 2019 to RM 796.2 billion in 2020.”
He said the lower imports meant that the domestic economic demand was weak last year.
“This means less purchases at the local shopping malls of both imported and locally produced goods, which has a negative impact on our retailers.
“Lower demand for imports is also a leading indicator of weak local economic conditions in the near future.”
Ong, of DAP, gave the example that the lower imports of machinery and construction materials such as iron and steel mean that the construction industry is likely to remain weak in 2021.
He said while it was encouraging that exports managed to weather the impact of Covid-19, it would be wrong to “boast” about the trade surplus.
“A healthy economy should experience growing exports and also imports which are growing at around the same level as exports, and perhaps slightly more”.
Ong added that the country was in for a challenging 2021 despite the “optimistic” Gross Domestic Product (GDP) growth projection by the finance ministry of between 6.5% to 7.5% for the year.