KUALA LUMPUR (Nov 6): Malaysia’s current account surplus is expected to narrow to RM48.46 billion in 2020, from RM50.85 billion in 2019, due to a widening deficit in the services account despite a higher surplus in the goods account and as the nation registers a lower income account deficit, the Ministry of Finance (MoF) said in its Economic Outlook 2021 report.
The MoF said the country’s 2020 travel account is anticipated to record a deficit for the first time since 1989 and that the nation’s 2021 current account balance is expected to record a surplus of RM20.3 billion.
For 2020, the MoF said "the goods account is anticipated to record a higher surplus of RM130.9 billion as exports are projected to outpace imports”.
“The services account is expected to post a wider deficit of RM50.3 billion mainly due to a decline in receipts in the travel and transport accounts.
“The travel account is anticipated to record a deficit of RM10.9 billion for the first time since 1989 — on account of a significant decline in tourist arrivals as international borders are closed to contain the Covid-19 pandemic,” the MoF said.
For 2021, the MoF said its current account surplus forecast of RM20.3 billion is in line with expansion in domestic industrial and investment activities.
The MoF said the goods account surplus is estimated at RM113.3 billion, supported by a gradual recovery in global trade activities.
"The deficit in the services account is anticipated to narrow to RM30.9 billion amid a surplus in the travel account.
“During the year, the travel account is expected to improve as tourism activities recover gradually. Receipts in the travel account are projected to increase to RM53.5 billion, driven by higher tourist arrivals and per capita spending, which more than offset residents’ spending abroad for leisure, business and pilgrimage purposes,” the MoF said.
For more stories on the Economic Report 2020/2021, click here.