High Oil Prices Support Malaysia’s Export Earnings -- CGSI

KUALA LUMPUR, Oct 20 (Bernama) -- Elevated oil prices continue to support Malaysia’s petroleum product and liquefied natural gas (LNG) exports, further boosting export earnings, CGS International Securities Malaysia Sdn Bhd (CGSI) said.

In a note today, CGSI said oil and gas-related exports remained supportive, expanding 40.2 per cent year-on-year in September, with petroleum product exports rising by 32.9 per cent and LNG exports increasing by 45.7 per cent.

It remained constructive on the export outlook following the strong performance in the first nine months of 2026 (9M 2026).

“We expect Malaysia’s external trade performance to remain resilient through the remainder of 2026, supported primarily by the ongoing artificial intelligence-driven semiconductor upcycle and sustained demand for electric and electronic products,” it said.

CGSI said export growth remained broad-based across major markets, suggesting resilient external demand.

Malaysia’s export growth accelerated further to 54.5 per cent in September, underpinned by strong demand for manufactured exports, which grew by 58.6 per cent, led by exceptional growth of 69.2 per cent in electrical and electronics products.

“Export performance was further boosted by record shipments to key markets, with exports to the United States surging by 89.9 per cent to a fresh record high of RM38.0 billion, while exports to China rose by 22.1 per cent,” it said.

CGSI said import growth also remained robust, with intermediate goods imports rising by 69.6 per cent, and Malaysia’s cumulative trade surplus widened to RM232.4 billion in 9M 2026 from RM107.7 billion in the corresponding period last year.

However, it cautioned that the outlook remained vulnerable to a slowdown in global artificial intelligence investment, weaker semiconductor demand and heightened trade policy or geopolitical uncertainties.

On domestic prices, CGSI said transport inflation accelerated to 2.5 per cent in September from 2.0 per cent in August, reflecting a sharp rebound in global crude oil prices, with Brent crude rising to US$116.80 per barrel from US$90.90.

“Nevertheless, persistent strength in global oil prices could keep transport-related inflation elevated and pose upside risks should energy costs remain higher for longer,” it said.

CGSI said sustained government policy support, including electricity bill protections, RON95 and BUDI Diesel fuel subsidies, selected food price controls and Jualan Rahmah initiatives, had helped mitigate the pass-through of external cost pressures to consumers and businesses.

It maintained its 2026 headline inflation forecast at 1.9 per cent, expecting inflation to remain relatively contained in the fourth quarter, supported by existing subsidy mechanisms, targeted cost-of-living measures and a stable ringgit.

-- BERNAMA