Malaysia’s external trade delivered a record-breaking performance in the first half (1H) of 2026, demonstrating remarkable resilience despite heightened geopolitical tensions, supply chain disruptions and an increasingly unpredictable global trading environment.
According to the Malaysia External Trade Development Corporation (MATRADE), the country’s total trade expanded by 22.4% year-on-year to a historic RM1.796 trillion, while exports surged by 27.5% to RM971.59 billion—the fastest growth recorded since 2021. Imports also increased by 16.9% to RM824.44 billion, resulting in a trade surplus of RM147.15 billion, equivalent to 94% of Malaysia’s total trade surplus achieved throughout 2025.
The analysis, prepared by MATRADE’s Internal Trade Analysis Unit and Corporate Communications Unit, offers a deeper perspective on the factors behind Malaysia’s strong trade performance beyond the headline figures.
Record Trade Performance Reflects Strong Export Fundamentals
Malaysia’s export success was not merely reflected in overall trade values but also in the breadth of its performance across international markets.
The country recorded trade surpluses with 158 trading partners, while 92 markets generated larger surpluses compared to the same period last year. In addition, Malaysia achieved net trade surpluses across 14 major product categories, highlighting the diversity and resilience of its export portfolio.
According to MATRADE Chairman Dato’ Seri Reezal Merican Naina Merican, the figures demonstrate more than short-term success.
“Numbers tell us what happened, but they do not explain why it happened or what it means for Malaysia’s trade future. Our analysis provides a deeper understanding of the forces driving Malaysia’s trade resilience.”
Diversified Markets Cushion Geopolitical Challenges
Although geopolitical instability in West Asia affected Malaysia’s exports to the region, MATRADE noted that the country’s diversified export strategy helped mitigate the impact.
Exports to West Asia declined 18.3% during the first half of the year, largely due to weaker shipments to the United Arab Emirates, Saudi Arabia and Iran. However, stronger exports to relatively stable markets helped offset the decline.
Among the strongest-performing markets were:
- Bahrain (+35.8%)
- Jordan (+9.8%)
- Cyprus (+84%)
MATRADE attributed this resilience to its network of 47 overseas trade offices, which continue to identify new opportunities, strengthen commercial partnerships and expand Malaysian exporters’ access to non-traditional and high-growth markets.
Traditional Trading Partners Continue to Drive Growth
Malaysia also recorded robust export growth across its established trading partners.
Exports to the United States surged 54.8% year-on-year to RM173.37 billion, while shipments to ASEAN increased 18.6% to RM259.60 billion.
Other major export destinations also registered significant growth, including:
- European Union (+28.4%)
- China (+23.3%)
- Taiwan (+66.5%)
- Hong Kong SAR (+48.6%)
These performances underscore Malaysia’s strong integration into regional and global supply chains.
Emerging Markets Strengthen Export Diversification
Beyond traditional destinations, MATRADE highlighted encouraging growth across emerging markets.
Combined exports to Africa, Central Asia, Latin America and Oceania increased 13.3% to RM72.15 billion.
Several markets recorded particularly impressive gains, including:
- Sudan (+222.3%)
- Democratic Republic of the Congo (+116.4%)
- Angola (+125.4%)
- Venezuela (+77.3%)
- Brazil (+30%)
- Turkmenistan (+39.7%)
- New Zealand (+29%)
The corporation noted that expanding into non-traditional markets remains a key strategy for reducing export concentration risks while strengthening long-term resilience.
Free Trade Agreements Continue to Deliver Results
Malaysia’s network of Free Trade Agreements (FTAs) continued to support export growth.
Exports to FTA partner countries rose 21.5% to RM616.55 billion, accounting for nearly two-thirds of the country’s total exports. Nineteen of Malaysia’s 24 FTA partners recorded positive growth.
Among the strongest-performing FTA markets were:
- Republic of Korea (+31.5%)
- Japan (+9.1%)
- Australia (+9%)
- Mexico (+49.6%)
- United Kingdom (+36%)
Meanwhile, exports to Regional Comprehensive Economic Partnership (RCEP) markets climbed 19%, while shipments to Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) member countries increased 17%, reinforcing the strategic value of Malaysia’s participation in major regional trade agreements.
Malaysian-Owned Companies Power Export Growth
One of MATRADE’s key findings is the increasingly significant contribution of Malaysian-owned companies to the nation’s export performance.
While multinational corporations remain important contributors, local enterprises now hold substantial ownership across many of Malaysia’s strategic export sectors, demonstrating growing domestic industrial capabilities.
Across nine of Malaysia’s ten largest export sectors, Malaysian-owned companies hold more than 40% ownership, reflecting the country’s strengthening local industrial base.
E&E Sector Continues to Lead Malaysia’s Exports
The electrical and electronics (E&E) industry remained Malaysia’s largest export contributor during the first half of 2026.
E&E exports surged 42.5% year-on-year to RM467.95 billion, representing 48.2% of total exports.
Semiconductors accounted for 73.7% of all E&E exports, supported by sustained demand from key markets including the United States, Singapore, the European Union and Japan, as artificial intelligence adoption and digital transformation continued to drive global demand.
Energy, Palm Oil and Chemicals Strengthen Export Base
Malaysia’s resource-based industries also delivered solid performances.
Led by PETRONAS, petroleum product exports increased 27.4%, while liquefied natural gas (LNG) exports rose 12.4%, supported by a 21.4% increase in export volumes and continued global energy demand.
Malaysia also strengthened its position within the palm oil value chain. Malaysian-owned companies account for approximately 70% of agriculture and edible oil refining activities and over 63% of downstream palm-based oleochemicals, industrial fatty acids and biodiesel production.
Consequently, exports of palm oil-based manufactured products increased 7.1% to RM20.83 billion, driven primarily by stronger oleochemical exports.
The country’s chemicals and chemical products sector also continued to mature, with Malaysian-owned firms controlling more than 72% of the industry across specialty chemicals, polymers, fertilisers, cleaning products and personal care manufacturing.
Exports Continue to Support Malaysia’s Economy
MATRADE noted that Malaysia’s export performance has translated into broader economic gains.
The country’s strong trade momentum contributed to 5.6% GDP growth during the first half of 2026, while the Industrial Production Index rose 8.4% in May, driven largely by export-oriented manufacturing and electronics production.
Malaysia’s improving competitiveness was also recognised internationally after climbing from 23rd to 15th place in the IMD World Competitiveness Ranking 2026, marking its strongest performance in a decade.
MATRADE Continues to Strengthen Export Competitiveness
While acknowledging that geopolitical uncertainties and global supply chain challenges remain, MATRADE emphasised that it will continue supporting Malaysian exporters through market intelligence, commercial diplomacy and strategic guidance.
Through its network of 47 overseas trade offices and the Trade Resilience Task Force, the agency continues to monitor international market developments and provide businesses with timely insights to anticipate disruptions rather than merely react to them.
MATRADE reaffirmed its commitment to ensuring companies of all sizes—from large corporations to SMEs—have access to the resources needed to expand internationally and strengthen Malaysia’s long-term export competitiveness.
Concluding the analysis, MATRADE Chairman Dato’ Seri Reezal Merican Naina Merican expressed appreciation to staff across the organisation for their role in sustaining Malaysia’s export momentum.
He noted that the country’s first-half performance demonstrates not only the resilience of Malaysian exports but also the increasing strength of locally owned enterprises in driving the nation’s long-term economic growth.
