Malaysia’s exports are projected to expand at a faster pace, supported by stronger electrical and electronics shipments, wider market penetration, and rising re-exports, according to a research note from MBSB Research. The outlook suggests these drivers should cushion the impact of higher U.S. tariffs and limit a sharper slowdown in external trade.
Exports are forecast to grow 6.0% in 2025, slightly above the estimated 5.8% expansion in 2024. Imports surged 15.8% year-on-year in November, the fastest increase since April 2025, driven by a rise in capital goods purchases tied to demand for non-transport equipment. The firm revised its import growth projection to 5.5% from 4.9%.
On a month-on-month basis, exports fell 9.0% in November, reversing a 6.7% increase in October and marking the weakest monthly performance since January 2025.
The steeper decline in exports compared to imports narrowed the monthly trade surplus sharply to RM6.1 billion in November, down from RM20.4 billion in October and RM14.8 billion a year earlier, a 58.8% year-on-year contraction.
MBSB Research attributed the weaker surplus to softer global demand for electrical and electronic products and declining exports of palm oil, chemicals, and liquefied natural gas. Despite the soft patch, the firm said the global technology up-cycle should continue to support E&E exports and offset weakness in commodity shipments.
The research house expects fluctuations in E&E trade to remain the main determinant of Malaysia’s trade surplus. LNG and palm oil are still expected to contribute positively to net exports. Stronger imports could weigh on the goods balance and act as a drag on economic growth in the fourth quarter of 2025.
Robust demand for capital goods is expected to keep the current account surplus below 2% of GDP into 2026. MBSB Research expects resilient E&E exports, while the mining sector may continue to weigh on growth.
It warned that potential semiconductor tariffs pose downside risks, though the Agreement on Reciprocal Trade with the United States could improve market access from 2026.
According to the firm, broadening export diversification and strengthening bilateral trade ties will be crucial to mitigating external headwinds amid easing trade tensions. Domestic demand is expected to remain resilient and continue supporting Malaysia’s overall economic growth.
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