Exports remain on a firm footing
Malaysia’s exports remained resilient at +7.0% YoY in November, albeit easing from October’s +15.7% surge and below Bloomberg consensus of +11.6%. Imports accelerated further to +15.8% (Oct: +10.0%), driven by stronger capital and intermediate goods demand. Consequently, the trade surplus narrowed sharply to RM6.1bn (Oct: RM20.4bn). On a YTD basis, exports and imports expanded by +6.1% and +5.6% respectively (11M24: +4.8% and +13.3%), underscoring trade resilience in the early phase of US tariff implementation.
Diversified export markets cushion US softness
Manufactured goods recorded sustained expansion, albeit at a softer pace (+7.9% YoY; Oct: +15.7%), with E&E pulling back from October’s surge (+15.0%; Oct: +26.5%). Mining (+9.9%; Oct: +8.4%) provided additional lift, supported by an improvement in LNG (-12.5%; Oct:
-17.6%). By destination, shipments to Singapore slowed sharply (+4.1%; Oct: +27.2%), while exports to the US declined (-0.9%; Oct: -2.6%). In contrast, exports to China, Malaysia’s third-largest market, strengthened further for the month (+9.3%; Oct: +7.5%), underscoring the role of diversified export markets amid volatile US trade flows.
Capital imports signal sustained investment momentum
Capital goods imports surged further (+56.8% YoY; Oct: +51.6%), reaffirming sustained investment momentum, particularly from the ongoing infrastructure projects and continued data-centre expansion. According to BNM, data centres accounted for 51% of net FDI inflows in 2024, highlighting its increasing role in attracting high value FDI. With only around 20% of committed data centre capacity currently operational, there remains a sustained investment pipeline ahead.
In addition to positive spillovers into job creation that support a more resilient private consumption trend over the medium term, there are tentative signs that operational data centres have begun to lift Information and Communications Technology (ICT) services exports. In 9M25, ICT services exports grew by 9% YoY to RM16.8bn, up from RM15.5bn in the corresponding period last year.
Meanwhile, intermediate goods imports rebounded (+5.0% YoY; Oct: -1.5%), pointing to firmer order pipelines. While we caution that monthly intermediate imports can be volatile, the underlying trend suggests export momentum should remain firm in the near term.
Upward revision to growth outlook
The positive export prints in recent months reinforce our view that trade momentum remains intact in 2025, particularly during the early phase of US tariff implementation. Semiconductors remain exempt from US tariffs, while the conclusion of the US-Malaysia Agreement on Reciprocal Trade (ART), under which Malaysia’s semiconductor sector may receive special consideration, further caps near-term tariff risks.
Given the robust 11M25 export growth of +6.1% YoY, we revise our full-year 2025 export growth forecast upward to +6.0% (previously +4.2%). Looking ahead, we project 2026 export growth at +4.8%. Reflecting the stronger 2025 export outlook and improving trade dynamics carrying into next year, we raise our 2025 GDP growth forecast to +4.7% (previously +4.5%) and our 2026 GDP growth forecast to +4.3% (previously +4.1%).
That said, key uncertainties remain in 2026, including the extent to which higher tariff-related costs are passed on to US consumers and the resulting spillover effects on US demand. In addition, potential US semiconductor tariffs remain a risk for Malaysia’s E&E sector, which accounts for around 40% of total exports. Our more moderate 2026 growth projection reflects this external risk backdrop.
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