MALAYSIA’s trade performance in January 2026 remained firm at the start of the year, with total trade expanding by 12.6% year-on-year (YoY) to RM272.37 bil, signalling continued resilience in external activity despite a softer global trade backdrop.
Exports rose by 19.6% YoY to RM146.87 bil, marking the seventh consecutive month of expansion and reflecting sustained demand, particularly within E&E segments amid the ongoing semiconductor upcycle.
Imports increased by 5.3% YoY to RM125.50 bil, in line with steady domestic demand.
As a result, the trade surplus extended for the 69th consecutive month since May 2020 to RM21.37 bil, reinforcing Malaysia’s external competitiveness even as global trade conditions remain uneven.
“Looking ahead, we expect Malaysia’s trade momentum to moderate in 2026 against a softer global trade backdrop and a more procedurally complex policy environment, although the ongoing semiconductor upcycle should continue to provide a partial offset for E&E exports,” said Public Investment Bank (PIB).
Global trade conditions remain highly sensitive to developments in US tariff policy, particularly as legal constraints reshape the scope of executive trade authority.
A recent US Supreme Court ruling narrowing the use of emergency powers under the International Emergency Economic Powers Act (IEEPA) to impose broad tariffs has introduced an institutional layer of uncertainty.
While the decision constrains executive discretion, it does not eliminate the possibility of alternative statutory trade actions.
“In our view, this development reduces the likelihood of abrupt tariff escalation but may prolong decision timelines, reinforcing a cautious bias in corporate investment and cross-border supply chain planning,” said PIB.
Export performance remained firm in January, anchored by robust manufactured goods shipments, which accounted for 86.7% of total exports and expanded by 22.3% YoY to RM127.4bil.
The increase was driven primarily by E&E products, which rose by RM20.0 bil or +39.5% YoY, alongside gains in other manufactured products of RM1.9 bil or +42.3% YoY and optical and scientific equipment of RM1.5 bil or +36.2% YoY.
The strength in E&E exports remains consistent with the ongoing semiconductor upcycle, which continues to provide cyclical support to Malaysia’s external sector.
In contrast, exports of agricultural goods, representing 6.0% of total exports, declined by 2.7% YoY to RM8.88 bil in January 2026, largely reflecting lower export prices of palm oil and palm oil-based products despite firmer shipment volumes.
Exports of mining goods, also accounting for 6.0% of exports, rebounded by 2.7% YoY to RM8.76 bil, supported by stronger shipments of metalliferous ores and metal scrap.
While manufactured exports continue to act as a key stabilising force, persistent trade policy uncertainties since early 2026 and heightened geopolitical tensions pose downside risks to export momentum in the months ahead, particularly if external demand softens further or tariff related measures broaden in scope.
In January 2026, total imports expanded by 5.3% YoY to RM125.50 bil, reflecting continued domestic demand at the start of the year.
Intermediate goods imports, which accounted for 45.9% of total imports, declined by 5.1% YoY to RM57.65 bil, largely due to lower imports of parts and accessories of non-transport capital goods.
Capital goods imports, representing 12.6% of total imports, fell more sharply by 20.7% YoY to RM15.80 bil, indicating softer non transport investment related purchases.
In contrast, consumption goods imports increased by 16.7% YoY to RM11.73 bil, supported by stronger imports of durable goods, underscoring resilient household spending momentum. —Feb 23, 2026
Main image: Britannica
