THE “highest ever” trade surplus announced by the government is actually a sign of a weak domestic economy and therefore nothing of which to be proud, said Bangi MP Ong Kian Ming today.

The former deputy minister of international trade and industry said Malaysians should not be too happy with current International Trade and Industry Minister Azmin Ali’s “highest ever” trade surplus announcement on January 30.

In a statement, Ong forecasts Malaysia’s economy will likely remain lacklustre this year.

Citing external trade figures from the Department of Statistics Malaysia (DOSM), Ong pointed out the country’s overall trade decreased by RM67.3 billion or 3.6% from RM1.845 trillion in 2019 to RM1.777 trillion last year.

Malaysia’s total exports last year, he added, decreased by 1.4% or RM14.1 billion compared to 2019.

“The main reason why Malaysia was able to increase its trade surplus by 26.9% from RM145.7 billion in 2019 to RM184.8 in 2020 is because total imports experienced a large decrease of 6.3% or RM53.2 billion from RM849 billion in 2019 to RM 796 billion in 2020,” he said.

He said while it was encouraging that Malaysia’s total exports managed to weather the Covid-19 economic uncertainties last year, “it would be wrong to boast about Malaysia’s highest ever trade surplus caused by a large fall in our imports.”

“Lower imports means that the domestic economic demand was very weak in 2020.

“This means less purchases at the local shopping malls of both imported and locally produced goods, which has a negative impact on our retailers.

“Lower demand for imports is also a leading indicator of weak local economic conditions in the near future,” he said.

To illustrate his point, Ong said lower imports of machinery and construction materials such as iron and steel means that the construction industry is likely to remain weak this year.

“A healthy economy should experience growing exports, while imports should be growing at around the same level as exports and perhaps slightly more.”

Ong said while trade during Pakatan Harapan (PH) brief stint in power did shrink by 2.5% in 2019, it was not accompanied by negative GDP growth.

He said the GDP grew by 4.3% under PH in 2019, while it is expected to contract by at least 4% in 2020 under the present Perikatan Nasional (PN) government.

“With the ongoing MCO 2.0, local demand in the first quarter of 2021 will continue to remain weak.

“We are in for a challenging 2021 despite the optimistic GDP growth projection by the Ministry of Finance of between 6.5% to 7.5% for the year,” he added. – February 5, 2021.