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MALAYSIA achieved a historic trade milestone in 2025 as total trade exceeded RM3 trillion for the first time, underscoring the economy’s ability to weather a challenging global environment marked by slowing growth, geopolitical uncertainty and financial market volatility.
Data from the Malaysia External Trade Development Corporation showed total trade expanded 6.3 per cent year on year to RM3.06 trillion.
Exports rose 6.5 per cent to RM1.61 trillion, marking the fifth straight year above the RM1 trillion level, while imports grew 6.2 per cent to RM1.45 trillion.
The performance delivered a trade surplus of RM151.8 billion, extending Malaysia’s unbroken surplus run to 28 consecutive years since 1998.
Economists said the record performance reflects structural strengths in Malaysia’s trade ecosystem, even as they cautioned that sustaining the momentum into 2026 will depend heavily on global conditions.
Sunway University economics professor Dr Yeah Kim Leng said the results demonstrated Malaysia’s strong fundamentals and its ability to benefit from trade and investment diversion linked to the United States-China trade conflict.
“The trade performance is also impressive given the appreciation of the ringgit against the US dollar and other currencies in 2025,” New Straits Times reported him saying. “The key contributing factors are the Malaysia's diversified exports and partners and, importantly, its central position in the global semiconductor supply chain.”
He said rising trade volumes also mirrored the positive spillovers from the China+1 strategy, which had driven higher foreign and domestic fixed capital investment, expanding Malaysia’s trade capacity.
While global output and trade growth are expected to soften slightly in 2026, he expects Malaysia’s trade to remain resilient, supported by sustained semiconductor demand, capacity expansion and the normalisation of tariff effects following the US-Malaysia tariff agreement.
“The economy-wide impact of currency changes is not expected to be huge given the high import content of many export-oriented industries,” he said. “Import-dependent sectors as well as structural upgrading that requires import of capital goods and technology will benefit from the stronger ringgit.”
Universiti Teknologi Mara senior lecturer Dr Mohamad Idham Md Razak said Malaysia’s diversified trade structure and strong foothold in key export segments were decisive in lifting trade beyond RM3 trillion.
“The main drivers were resilient demand for electrical and electronics products, particularly semiconductors, a recovery in tourism-related exports and services, as well as continued trade with major partners in Asean, China and the US,” he said.
He added that global supply chain reconfiguration, firm commodity prices earlier in the year and improvements in trade facilitation also played a role. However, he warned that another record year cannot be taken for granted.
“Malaysia's strong integration in high-value manufacturing, continued investment inflows and expanding regional trade links provide a buffer,” he said.
“The outlook is cautiously optimistic, but sustaining new records will depend heavily on global conditions remaining manageable rather than deteriorating sharply.”
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said total trade is likely to remain around RM3 trillion in 2026, although growth could moderate as global uncertainties persist.
He noted that exports in 2025 were driven largely by strong electrical and electronics shipments and continued growth in exports to the US, but said momentum could ease as the full effects of US tariffs filter through.
“Such trend may not be repeated this year as cautious sentiments could result in moderation in investment activities. Overall, we can still expect total trade to continue to hover around RM3 trillion in 2026,” he said.
Economist Dr Geoffrey Williams said the record outcome had been building steadily throughout the year and was largely within expectations, despite widespread concerns over US tariff policies.
“Tariff renegotiation had a positive impact on Malaysia's exports,” he said, adding that trade performance in 2025 was uneven at times. He noted that the trade balance narrowed sharply in certain months due largely to currency movements.
“The ringgit strengthened significantly from October and this hit exports in November. In addition front-loading of exports meant that orders had been filled ahead of year-end,” he said. “The ringgit is overvalued which makes exports more expensive, this is the main risk to trade.”
He cautioned that the ringgit’s nearly 10 per cent appreciation and the risk of a sharp correction could pose a bigger challenge to trade in 2026 than tariffs.
In a statement, Matrade said Malaysia recorded its highest-ever trade, export and import values in 2025, reflecting the country’s competitiveness and resilience amid an increasingly uncertain global trade landscape.
“Export growth was supported by record-high shipments to traditional trading partners, namely Asean, the United States, Taiwan and the European Union, reflecting Malaysia’s strong participation in high-value, technology-intensive global supply chains,” it said, noting that exports to China grew at a more moderate pace.
Matrade added that Malaysia’s extensive free trade agreement network, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, continued to facilitate market access, diversify export destinations and mitigate trade risks.
Exports to Hong Kong, Mexico and Canada reached record highs, supported by growth across a wide range of goods.
Matrade chairman Datuk Seri Reezal Merican Naina Merican also expressed appreciation to Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani for leading successful trade missions that helped expand exports of key commodities, particularly palm oil, to both established and new markets during his tenure as plantation and commodities minister.
Palm oil and palm-based product exports, which accounted for 7.8 per cent of total exports, rose 9.2 per cent to RM124.86 billion, driven by higher prices and expansion into markets including India, China, Turkiye, Afghanistan, Togo, Tanzania, Kenya, Nigeria, Mozambique and Yemen.
Economists said the record trade performance, achieved despite prolonged global uncertainty, positions Malaysia with a solid but carefully balanced outlook as it heads into 2026. - January 21, 2026