KUALA LUMPUR, March 3 — Malaysia’s imports and exports shrank by 6.6 per cent and 5.1 per cent, respectively, in January, resulting in a RM12 billion trade surplus for the month, according to estimates by RAM Ratings.

The rating agency attributed the contraction largely to seasonally subdued regional industrial activity during the Lunar New Year festivities, compounded by industrial disruptions arising from the COVID-19 outbreak.

"Given that the number of global COVID-19 infections is still rising, the outbreak is expected to remain a drag on global trade in the near term.

"The severity of Covid-19 is exacerbated by the fact that China is both the epicentre of the outbreak and a central node in the global value chain,” it noted in a statement today.

RAM Ratings pointed out that China — Malaysia’s largest trading partner — was the second largest source of value-added in the world after the US.

Malaysia’s exports to the republic surged 17.8 per cent year-on-year in December 2019.

In the same month, Malaysia recorded an increase in both exports and imports, resulting in a trade surplus of RM12.6 billion.

Within Asean, RAM Ratings said, Malaysia’s exports were the second most vulnerable to the outbreak in China after Vietnamese exports, with 7.7 per cent of the country’s exports relying on inputs from China.

The Department of Statistics Malaysia is due to release its latest trade data tomorrow. — Bernama