Services exports surge to RM195b in 2023
Travel registered RM17b surplus last year from higher foreign tourist spending in Malaysia
Malaysia’s total trade in services registered RM433.2 billion in 2023, representing 23.8% of GDP at current prices.
The deficit in services for year 2023 improved to a lower deficit of RM43.2 billion as against a deficit of RM58.2 billion in 2022, as reported yesterday by the Department of Statistics Malaysia in the Statistics of International Trade in Services 2023.
Chief Statistician of Malaysia, Datuk Seri Dr Mohd Uzir Mahidin said that the lower services trade deficit in 2023 surpassed the pandemic level of RM47.2 billion in 2020.
“Exports of services grew by 37.9% to RM195 billion (2022: RM141.4 billion). In the meantime, imports of services rose by 19.3% to RM238.2 billion from the preceding year (2022: RM199.6 billion),” he added.
Travel, the main contributor to the services trade, is still catching up to almost pre-pandemic highs. Travel in 2023 improved to a surplus of RM17.1 billion after recording a deficit for three consecutive years, strongly supported by higher foreign tourist spending in Malaysia. Exports of travel rebounded significantly to RM68 billion as compared to RM28.7 billion in the previous year. This is in line with the increase in tourist arrivals by almost 100% from 10.1 million persons in the previous year to 20.1 million persons. Similarly, imports of travel also expanded from RM29.9 billion in the previous year to RM50.9 billion in 2023.
The narrowing deficit in services trade was also driven by transport which registered a lower deficit of RM31.4 billion in 2023 as compared to RM34.2 billion in the previous year. Exports of transport surged RM30.8 billion as against RM26.6 billion in 2022, mainly contributed by air and sea transports. Similarly, imports of transport grew from RM60.8 billion in the previous year to RM62.3 billion in 2023, dominated by freight activities.
Besides that, other business services which posted a deficit of RM17 billion in 2023 remained the second top contributor to the services export after travel.
Exports of this component amounted to RM36.8 billion in 2023 (2022: RM31.6 billion), predominantly in professional & management consulting activities. Concurrently, the imports increased to RM53.8 billion (2022: RM47.5 billion), impelled by technical, trade-related & other business services.
Singapore was the primary destination for Malaysia’s services export with a value of RM55.3 billion as compared to RM37.5 billion in the previous year, mainly in travel, other business services and transport. The US ranked second at RM36.6 billion in exports, with China following at RM12.9 billion.
In the meantime, the US became the main source for services import valued at RM76.1 billion in 2023, particularly in travel, other business services and transport.
This was followed by Singapore with a value of RM41.3 billion and the UK with RM13.3 billion.