Malaysia’s trade deficit in services hit record in 2020
Malaysia’s trade deficit in services increased to 47.4 billion RM (11.5 billion USD) in 2020, the highest deficit ever recorded, owing to the unprecedented COVID-19 pandemic that has significantly restrained economic activities globally.
People in Kuala Lumpur, Malaysia wait to get vaccinated (Photo: AFP/VNA)The Department of Statistics Malaysia (DOSM) said total trade in services amounted to 232.7 billion RM, contributing 16.1 percent of gross domestic product (GDP at current prices) last year.
Exports of services declined to 92.6 billion RM from 170.2 billion RM in the preceding year following disruption in key services components, namely travel and transport.
Similarly, imports of services decreased to 140.1 billion RM from 181.1 billion RM in 2019, it said in a statement today.
Chief statistician Datuk Seri Mohd Uzir Mahidin said travel, the mainstay of Malaysia’s services trade all this while, faced a challenging situation, which led to the highest deficit in 2020.
“This hardest-hit industry during the COVID-19 pandemic turned to a deficit of 7.7 billion RM, for the first time in 30 years from a surplus of 30.8 billion RM in 2019,” he was cited by Bernama as saying.
He said exports of travel component nosedived 84.7 percent to RM12.6 billion due to substantially lower number of tourist arrivals.
Malaysia recorded 4.3 million international tourists in 2020, a significant decrease of 83.4 percent compared to 2019 following border closure and travel restrictions imposed by countries across the world.
Meanwhile, exports value of transport component slipped 37.1 percent to RM13.7 billion in 2020 due to the significant drop in air transport.
“Air transport that heavily relies on air passenger exports plummeted 72.3 percent as a repercussion from global travel limitations to contain COVID-19.
“Even so, exports of sea and other transport, particularly in postal and courier services, surged to 7.7 billion RM and 2.4 billion RM, respectively,” he said.
Mohd Uzir said based on the Economic Outlook 2021, Malaysia’s trade in services is projected to record a deficit of 30.9 billion RM with the well-planned implementation of movement control order (MCO)./.
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