KUALA LUMPUR: Malaysia’s trade is expected to expand at a moderate pace of 2% to 3% this year, said Malaysia External Trade Development Corp (Matrade) chief executive officer Datuk Dr Wong Lai Sum.

“The lower target is reflective of the moderation in world growth, uncertainties created by fluctuations in oil prices and mixed impact on sectors due to the volatile exchange rates affecting the ringgit,” Wong told a news conference to announce Malaysia’s trade performance for 2014 here yesterday.

She said the lower estimated trade growth would result in exports growing by between 2% and 3% this year.

Last year, Malaysia’s total trade grew by 5.9% to RM1.45 trillion from RM1.37 trillion in 2013 on robust demand for manufactured goods which jumped 7.1%. In 2014, exports rose 6.4% to RM766.13 billion while imports increased 5.3% to RM683.02 billion, translating into a trade surplus of RM83.11 billion.

Wong said the trade surplus rebounded by 16.6% in 2014 compared with a 25.7% decline in 2013 and a fall of 22.8% in 2012. “The impetus growth in exports was a record for Malaysia, which has been able to achieve a 17th consecutive year of trade surplus despite uncertain economic conditions,” she said.

Among the top performing export sectors are electrical and electronics products, which grew 8.1%, processed foods (16.3%), textiles and clothing (13%), plastic manufacturing (11.6%), chemicals (8.5%) and machineries (10.9%). However, exports of crude natural rubber declined 34.9% to RM4.57 billion due to a 23.6% drop in average unit price and a 14.8% reduction in export quantity.

Geographically, exports to the Asean countries accounted for 28% of the total exports, India (4.2%), the United States (8.4%), China (12.1%) and Japan (10.8%). “Exports to Asean grew 6% to RM213.58 billion, which reflected a strong uptake. The expansion in export was spurred by higher demand for manufactured products and steady demand in commodity,” she said, adding that there was also greater demand from emerging markets such as Africa, Central Asia and South Asia.

She noted that China remains Malaysia’s largest trading partner for the sixth consecutive years since 2009, with total trade of RM207.85 billion. Last year, however, total exports to China declined 4.8% to RM92.35 billion, while total imports jumped 8.7% to RM115.5 billion.

Going forward, Wong reckoned that exports of electrical and electronic products will continue to grow due to new waves of technology such as the Internet of things.“We also expect that the US will continue its growth momentum with stronger consumer and business confidence, while Asean  will have stronger integration among business networks that will sustain Malaysia’s exports,” she added.

This article first appeared in The Edge Financial Daily, on February 6, 2015.