13 May 2022
Despite lower exports, Malaysia continued to record a surplus in its current account balance (CAB) for the first quarter of 2022 (1Q2022).
Data released by the Department of Statistics Malaysia (DOSM) today shows that the country recorded a RM3 billion surplus in 1Q2022, down from RM15.3 billion in 4Q2021.
Chief statistician Uzir Mahidin said the surplus was mainly supported by the net exports of goods.
The data, from the Balance of Payments and International Investment Position Statistics for the First Quarter of 2022, shows that Malaysia exported a total of RM268.9 billion worth of goods in 1Q2022, down from RM271.3 billion in the previous quarter.
The main exports were electrical and electronics items, petroleum and palm oil-based products to China, Singapore and the United States.
However, imports of goods, mainly from China, Singapore and Taiwan, also went up by 4% to reach RM228.4 billion.
The surplus in the current account balance has been possible thanks to a lower deficit in the services trade.
The services trade recorded a RM15 billion deficit in 1Q2022, an improvement from the RM15.4 billion in the preceding quarter.
The improvement is attributed largely to higher receipts in the telecommunication, computer and information services segment as well as lower payments in other business services.
The data shows that the export of services rose 2.2% to RM24 billion while imports rose 0.2% to RM39 billion.
Uzir noted that the deficit in the services account had been substantial since 2Q2020 as the travel segment was hit hard by the Covid-19 pandemic.
The segment continued to record a deficit in 1Q2022. While Malaysians spent a total of RM4.2 billion on their travels abroad, the country earned only RM200 million from foreign visitors, leaving it with a RM4 billion deficit.
The transport segment also posted a higher deficit of RM9.2 billion, thanks to the increase in payments for freight.
The deficit in the primary income account also rose – from RM19.6 billion in 4Q2021 to RM20.1 billion in 1Q2022.
Foreign companies operating largely in the manufacturing, mining and quarrying sectors in Malaysia also generated a lower income of RM35.5 billion in 1Q2022 compared with RM56.9 billion in the preceding quarter.
Earnings chalked up by Malaysian companies abroad fell as well — from RM37.3 billion in 4Q2021 to RM15.3 billion in 1Q2022. These companies are based mostly in Singapore, Australia and the United States and are engaged principally in mining and quarrying.
However, there are improvements elsewhere. Uzir said there was a net inflow of RM30.4 billion in the financial account, up substantially from just RM700 million in the previous quarter.
He attributed this to a turnaround in the proceeds of other investments that led to an inflow of RM19.6 billion in 1Q2022 against an outflow of RM10.6 billion in 4Q2021.
The country also recorded net inflows of RM20.8 billion in direct investments, mainly through higher settlement of exports and loans from abroad.
Foreign direct investments (FDIs) rose by RM5.9 billion to RM24.4 billion in 1Q2022. This came mostly from Switzerland, Hong Kong and the United States.
However, the direct investment abroad (DIA) receded to RM3.6 billion from RM7.9 billion, most of which went to Indonesia, Singapore and Brazil.
As at the end of 1Q2022, Malaysia has recorded RM812.1 billion in FDIs and RM551.7 billion in DIA.
The international reserves stood at RM485.8 billion at end of March 2022, compared with RM486.8 billion as of the end of 4Q2021.
Looking ahead, Uzir expressed confidence that the economy will perform better this year than it did last year given that the country has already begun the transition to the endemic phase of Covid-19.
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