KUALA LUMPUR (Sept 8): Malaysia’s trade performance is expected to continue its positive momentum from June 2020 into the second half of the year, driven by reopening of the economic sectors since the implementation of the Conditional Movement Control Order (CMCO).
Malaysia External Trade Development Corporation (MATRADE) chief executive officer Datuk Wan Latiff Wan Musa said only essential businesses were allowed to operate during the MCO, while lockdowns in most of parts of the world have affected the global supply chain.
"As far as I'm concerned, the worst is over. The major declined in our trade and exports actually took place in April and May with exports falling over 20%, simply because we had MCO from March 18.
"We are glad to see the improvements in our trade in June where export increased by 8.0% and even more encouraging we saw exports continued to rise in July by 3.1%, making it two consecutive months of increased (trade)," he told reporters on the sidelines of the eNational Export Day (eNED) 2020 here, today.
As an open economy where trade to gross domestic product (GDP) ratio stands at 121%, Wan Latiff said Malaysia also depends quite a bit on import in order to export.
"Global supply chain was badly affected (during MCO) and eventually affected Malaysia, that's why we saw a big drop in our trade and export in April and May," he said.
With the reopening of the economy in stages since the CMCO, Wan Latiff foresees that the decline in the first half would not be extended into the next few months or rather second half of this year.
"I would expect that the performance of trade and export in the second half would be much better compared to the first half. But we still need to be cautious with the potential of the outbreak of the second or third wave (of Covid-19) if we are not careful.
"It is very important for Malaysians to strictly adhere to the standard operating procedure (SOP) that the government has enforced as we don't want to see the government going back to implement strict MCO," he said.
Meanwhile, Deputy International Trade and Industry Minister Datuk Lim Ban Hong said Malaysia’s total trade in June 2020 expanded by 1.7% to RM144.78 billion, while exports bounced back with an 8.0% increase to RM82.82 billion.
"The manufacturing sector recovered with a double-digit growth and exports of manufactured goods, which made up 87.5% of total exports, picked up by 13.7% year-on-year to RM72.48 billion," he said in his keynote speech.
He said the impact of the Covid-19 pandemic on global supply chains has also forced businesses, in fact, entire industries, to rethink and transform their global supply chain model for business continuity.
"Hence, tapping into digital supply chain networks from the traditional linear supply chain models help businesses become more connected to their ecosystem which would enable end-to-end visibility, collaboration, agility and optimisation," he added.