Exports of services grew faster than imports in 2022, recording a 59.3% increase to RM140.3 billion from RM88.1 billion in the previous year. Meanwhile, imports of services rose 28% to RM196.7 billion from RM153.7 billion.

Travel, a crucial component of Malaysia’s services industry prior to the Covid-19 pandemic, experienced a remarkable revival in 2022 and played a crucial part in boosting the country’s trade in services.

“Exports of travel services increased substantially from RM300 million in the previous year to RM28.4 billion in 2022. Similarly, imports of travel services also showed an upward trend, reaching RM29.5 billion compared to RM15.2 billion in the previous year,” cited the department.

Despite the positive trajectory, the value of exports and imports remain substantially lower than their pre-pandemic peaks of RM82.1 billion and RM51.3 billion in 2019.

“As the growth of exports was faster than imports, travel improved to record a lower deficit of RM1.2 billion from RM14.9 billion in 2021,” it added.

According to the report, the manufacturing services component also helped narrow the country’s deficit in services trade.

This component achieved a surplus of RM16.3 billion, marking the highest surplus recorded in the past 10 years. Exports of this component valued at RM20.1 billion, while imports stood at RM3.9 billion.

Another noteworthy component is transport, which registered an impressive 55.4% year-on-year growth to RM25.6 billion in terms of exports. Imports of transport, meanwhile, surged 23.4% to RM59.6 billion.

“This resulted from the reopening of Malaysia’s border to all international visitors from April 1, 2022, which has stimulated the growth of air passenger transport exports throughout the year 2022,” the report stated.

The resurgence of the travel industry is expected to continue as countries worldwide reopen their borders.

However, DoSM acknowledges that several downside risks may have a moderating impact on the growth of Malaysia’s services trade.

“Considering potential external risks such as geo-economics fragmentation, geopolitical tensions, and global inflation, Malaysia’s trade in services is projected to experience moderate growth throughout 2023,” the report concluded.