Malaysia's export momentum softened in March, but the country's trade surplus widened to a one-year high, according to UOB economists Julia Goh and Loke Siew Ting [1]. The trade surplus reached MYR24.6 billion in March, up from MYR16.7 billion in February. Cumulatively, the trade surplus amounted to MYR63.2 billion in the first quarter of 2026, the largest since the first quarter of 2023 (4Q25: +MYR48.6bn) [1]. This robust trade balance is expected to result in a wider current account surplus of MYR15.0 billion in 1Q26, compared to MYR2.0 billion in 4Q25. The actual 1Q26 current account data will be released on 15 May, alongside the final GDP figure for the quarter [1].
Strong Electrical and Electronics (E&E) shipments and re-exports supported Malaysia's exports, while imports were primarily driven by capital goods [1]. Despite these positive figures, UOB economists highlight several risks to Malaysia's trade outlook, including geopolitical tensions in the Middle East and the potential prolonged closure of the Strait of Hormuz. Such disruptions could lead to higher input costs, supply chain issues, and elevated crude oil and shipping costs, which may inflate the import bill and offset export gains even if export volumes remain resilient [1].
UOB maintains a cautious stance on Malaysia's trade prospects, keeping its 2026 export growth forecast at 2.5%, which is significantly lower than Bank Negara Malaysia's (BNM) estimate of 8.6% for 2026 and 6.4% for 2025 [1]. The economists note that while the AI upcycle is expected to continue supporting Malaysia's trade this year, downside risks from global growth uncertainties and raw material constraints may prompt firms to adopt a more cautious approach in the near term [1].
CONCLUSION
Malaysia's trade surplus has reached its highest level in a year, but UOB economists remain cautious due to ongoing geopolitical and cost risks. The 2026 export growth forecast is maintained at 2.5%, well below the central bank's estimate, reflecting concerns over potential disruptions and softer demand.