Chief statistician Datuk Seri Mohd Uzir Mahidin said travel, Malaysia’s mainstay of trade in services throughout this time, faced a difficult situation, which led to the highest deficit in 2020. – Photo Hari Anggara

KUALA LUMPUR, June 9 – Malaysia’s trade deficit in services reached Ringgit 47.4 billion in 2020, the highest on record, due to the unprecedented Covid-19 pandemic which severely constrained economic activities in the world.

Malaysia’s Department of Statistics (DOSM) said total trade in services amounted to Ringgit 232.7 billion, contributing 16.1% to gross domestic product (GDP at current prices) last year.

Exports of services fell to Ringgit 92.6 billion from Ringgit 170.2 billion the previous year following disruptions in key service components, namely travel and transportation.

Likewise, imports of services fell to RM140.1 billion from RM181.1 billion in 2019, he said in a statement today.

Chief statistician Datuk Seri Mohd Uzir Mahidin said travel, Malaysia’s mainstay of trade in services throughout this time, faced a difficult situation, which led to the highest deficit in 2020.

“This industry hardest hit during the Covid-19 pandemic turned into a deficit of RM 7.7 billion, for the first time in 30 years compared to a surplus of RM 30.8 billion in 2019,” did he declare.

He said exports of travel components fell 84.7 percent to 12.6 billion ringgit due to a considerably lower number of tourist arrivals.

Malaysia recorded 4.3 million international tourists in 2020, a significant 83.4% drop from 2019 following border closures and travel restrictions imposed by countries around the world.

Meanwhile, the export value of the transport component slipped 37.1% to 13.7 billion ringgit in 2020 due to the significant decline in air transport.

“Air transport which relies heavily on air passenger exports fell 72.3% due to global travel limitations to contain Covid-19.

“Even so, the exports of shipping and other transportation, especially postal and courier services, reached RM 7.7 billion and RM 2.4 billion, respectively,” he said.

Mohd Uzir said the resumption of ocean freight, post and courier services was in line with the increase in consumer online shopping behavior since movement restrictions were applied in 2020.

“Nonetheless, services undergoing accelerated digital transformation have performed much better during this Covid-19 crisis.

“Telecommunications, IT and information services saw a tremendous opportunity throughout 2020 in the form of telecommuting, video streaming, cloud computing and other digital services,” he noted.

Exports of this component increased 7.9% to 13.4 billion ringgit, while imports increased 14.8% to 16.8 billion ringgit due to the rise in streaming subscriptions, especially for online movies.

This translates into a substantial increase in the number of Asian Netflix subscribers, which recorded 25.5 million from 16.2 million the previous year.

In addition, personal, cultural and recreational services recorded an increase in exports to RM2.4 billion, an increase of 3.1% from 2019.

“This has been led by the fastest growing gaming markets via digital platforms, as well as thriving streaming artists like Youtubers and Tiktokers,” he added.

Other business services were also the catalyst for export services with RM 27.1 billion in 2020.

However, its exports fell 7.6% from the previous year due to foreclosure measures in many countries that affected technical and commercial activities.

Meanwhile, imports of this component fell 9.3 percent to 29.8 billion ringgit, contributing to a lower deficit of 2.8 billion ringgit.

Regarding Malaysia’s trade in services with 193 countries in the world, he said that the United States (United States) has overtaken Singapore by being the top destination for services exports with a value of 24.8 billion ringgit , mainly in manufacturing and other business services.

Singapore, which was the main export market since 2010, became the second destination with RM18.9 billion, driven by travel exports, followed by the United Kingdom (United Kingdom), Hong Kong and the China, which collectively amounts to Ringgit 15.4 billion in 2020.

Meanwhile, the top importing countries for the year were the United States, Singapore, China, the United Kingdom and Japan, primarily in other business services and transportation.

He said based on Economic Outlook 2021, Malaysia’s trade in services is expected to register a deficit of RM 30.9 billion with the well-planned implementation of the Movement Control Order (MCO). – Bernama

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