KUALA LUMPUR (Mar 6): As the uncertain external environment becomes even more so of late, the resilience of Malaysia’s export performance has come into question, said RAM Ratings Services Sdn Bhd.

It said Malaysia's export of electrical and electronic equipment (31%), which is its largest of three prime exports (mineral fuels at 22% and other primary commodities at 17%), has already experienced a weakening in its position in specialisation since 2001.

This poses some cause for concern, vis-à-vis Malaysia’s standing as the second-largest E&E exporter in ASEAN after Singapore, it said.

"The implications are far-reaching, with the potential of exerting downward pressure on export earnings, if this key export were to lose its relevance in the global arena," it said.

However, it added that at present, such manufactured exports are still expected to receive a short-term boost from the currently weak ringgit, which is favourable to the expansion of exports.

It also said Malaysia's export performance remains resilient amid the global structural shifts in trade structures, with its wide export structure — Malaysia is the second most diversified export nation within ASEAN, in terms of product mix — and its export mix, which has remained relevant to global markets, as underlined by compatibility indices.

But the very same two reasons underlying its export resilience, also brings about the issue of heightened susceptibility to global economic shocks.

So, does such a scenario indicate Malaysia’s strong export run is coming to an end, it asked.

In response to its own question, RAM Ratings said "the longer-term indicators are mixed", even as it pointed out that the product-mix, compatibility and price competitiveness indicators, point to some positive trends, supporting the expectation that Malaysia’s export performance will be supported by the weaker ringgit and the up-cycle of industrialised economies.

"Although these favourable factors are anticipated to remain intact for at least a few more years, longer-term sustainability will require a concrete and credible strategy to drive high-value-added exports, and therefore the ability to compete beyond price," it concluded.