M`SIA EXPECTS NEGATIVE GROWTH IN EXPORTS THIS YEAR, SAYS MITI

KUALA LUMPUR, July 2 (Bernama) -- Malaysia's exports are expected to
experience a negative growth this year in tandem with the continuation of the
global economic slowdown in 2008, the Ministry of International Trade and
Industry (MITI) says.

In its 2008 report released Thursday, MITI also said that despite the
economic slowdown in Japan, United States of America (USA) and European Union
(EU), Malaysian exports to these countries will remain significant.

"Electrical and electronic (E&E), chemicals and chemical products,
machinery, appliances and parts will continue to be Malaysia's major export
products," it said.

Malaysia's emerging regional export markets, which include West Asia, Africa
and South Asia are expected to maintain their demand for Malaysia's export of
E&E products, chemicals and chemical products, jewellery and processed
food and thus continue as important export destinations for Malaysia in 2009, it
added.

"The manufacturing sector will continue to be the leading export sector
which has contributed to 70 percent of total monthly exports throughout 2008,"
it said.

MITI said E&E products would remain as Malaysia's largest contributor to
total exports despite the negative growth in 2008.

Other Malaysia's mainstay export products in 2009 are crude and refined
petroleum, liquefied natural gas (LNG), palm oil and crude rubber, it added.

Malaysia's total trade in 2008 reached RM1.2 trillion (US$1=RM3.50), an
increase of 6.8 percent from RM1.1 trillion in 2007. The increase was
broad-based with growth contributed by the manufacturing, agricultural and
mining sectors, said the ministry.

Malaysia recorded a trade surplus for the 11th consecutive year with a value
of RM142 billion in 2008.

As a result of diversification in both products and markets, as well as
continuous external demand in selected major markets, exports increased by 9.6
percent to RM663.5 billion compared with RM605.2 billion in 2007, it said.

Imports grew by 3.3 percent to RM521.6 billion in 2008 from RM504.8
billion in 2007.

Singapore, USA, Japan, China and Thailand remained Malaysia's top five
trading partners in 2008. Collectively, MITI said these countries accounted
for 52.5 percent of Malaysia's total trade.

Regionally, Malaysia's top three major trading partners in 2008 were
North-East Asia, Asean and North America. Malaysia's total trade with North-East
Asia and Asean increased by 6.9 percent and 6.7 percent respectively.

Total trade with these regions accounted for 58.9 per cent of Malaysia's
total trade in 2008.

In 2008, Malaysia's trade with North America contracted by 6.1 percent to
RM145.7 billion. Exports to USA, which accounted for 96.3 percent of Malaysia’s
exports to North America declined by 12.5 percent for the year.

The main reason for the decline was lower exports of E&E products which
contracted by 19.5 percent compared with 2007, said MITI.

Malaysia however recorded a double-digit growth in trade with new and
emerging markets, it added.

Trade with West Asia grew by 37 percent to RM54.4 billion, followed by
South Asia (29.8 percent to RM45.7 billion), Oceania (22.7 percent to RM43.6
billion), Africa (14.5 percent to RM18.9 billion) and Latin America (11.1
percent to RM20.3 billion).

The increase in the utilisation of the preferential access under Free Trade
Agreements (FTAs) also contributed to Malaysia's total trade in 2008.

Under the Asean-China Free Trade Agreement (ACFTA), a total of 13,723
preferential Certificates of Origin (CO) were issued in 2008. Exports under this
agreement increased by 13 percent to RM6.3 billion from RM5.6 billion in 2007.

In addition, Malaysia's exports under the Asean Common Effective
Preferential Tariff (CEPT) Scheme increased by 19.1 percent in 2008 to RM16.1
billion from RM13.5 billion in 2007.

A total of 139,894 COs under the CEPT Scheme were issued in 2008 compared
with 130,137 in 2007.

In 2008, preferential COs issued under the Malaysia-Japan Economic
Partnership Agreement (MJEPA) was valued at RM8.4 billion, an increase of 24
percent from RM6.7 billion in 2007.

In 2008, the structure of exports was relatively unchanged and all export
sectors registered growth.

MITI said the manufacturing sector continued to dominate Malaysia's exports
with a 70 percent share of total exports. Manufactured exports totalled RM464.5
billion, an increase of 1.8 percent from RM456.1 billion in 2007.

Mining exports increased by 42.4 percent to RM120.7 billion or 18.2 percent
share while agricultural exports grew by 32.3 percent to RM71.7 billion or 10.8
percent share.

Almost all sub-sectors within the manufacturing sectors registered increases
in exports in 2008 except for E&E products, jewellery as well as iron and steel
products.

Significant increases were recorded for chemicals and chemical products
which grew by 10.3 percent to RM40.5 billion, followed by processed food (grew
by 39.9 percent to RM12.1 billion) and rubber products (grew by 21 percent to
RM12.8 billion).

Malaysia's total imports in 2008 meanwhile grew by 3.3 percent to RM521.6
billion from RM504.8 billion in 2007. The growth was attributed mainly to higher
imports of intermediate and capital goods, said the ministry.

Imports of intermediate and capital goods accounted for 86.1 percent of
Malaysia's total imports. Imports of intermediate goods grew by 5.6 percent from
2007. Higher demand for intermediate goods was in response to the expansion of
manufacturing activities in Malaysia.

The largest import source in 2008 was China followed by Japan, Singapore,
USA and Thailand.

Major imports from China were E&E products, machinery, appliances and parts,
chemicals and chemical products, iron and steel products, as well as
manufactures of metal.

The top five imports from Japan comprised E&E products, machinery,
appliances and parts, iron and steel products, transport equipment and
manufactures of metal, it said.

-- BERNAMA