KUALA LUMPUR (Jan 31): Export growth in December 2018 may have surprised on the upside, but this was largely driven by the weaker ringgit during the month and a low base in the same period last year, according to Hong Leong Investment Bank (HLIB) Research.

"We remain cautious on the success of US-China trade talks and the impact on global growth and consequentially, Malaysia's exports," HLIB economist Felicia Ling said in a report today.

She noted that the continued slowdown in global economic activity and volatility in financial markets also remains a key downside risk to trade activity.

Yesterday, the Ministry of International Trade and Industry announced that exports rose 4.8% year-on-year in December 2018 to RM83.27 billion, double the 2.4% growth forecasts by economists according to an earlier Reuters poll.

This boosted full-year exports to RM998.01 billion in 2018, driven by growth in manufactured goods and mining.

Meanwhile, import growth eased to 4.9% in 2018, resulting in Malaysia registering its largest trade surplus since 2012 of RM120.3 billion.

Malaysia was one of the only two Southeast Asian nations to see exports grow last month alongside Vietnam, as its peers were hit by trade uncertainties, highlighted PublicInvest Research.

"Malaysia's diversified exports base have certainly come in beneficial during uncertain times like these," wrote Public Investment Bank economist Dr Rosnani Rasul. She added that the rebound in electrical and electronic sector as well as timber-based shipments had lifted export figures.

That said, Rosnani opined that regional export momentum would remain volatile unless and until there is a solution to the trade impasse between the US and China.