Malaysia’s January exports fell for the first time in eight months on weak global economic conditions and a slide in oil and gas shipments, government data showed today, confounding economists’ expectations for a rise.

Exports in January declined 2.8 percent from a year earlier, compared with 1.4 percent growth in December and a Reuters poll forecast of 2.5 percent. It last declined in May 2015.

The South-East Asian country’s exports had expanded at a slower pace in the last two months, hit by weak global prices for commodity shipments and a slowdown in China, Malaysia’s largest trading partner.

“Looking ahead, the trade balance (exports) will be held hostage by the evolution of oil prices. Ongoing economic headwinds could also keep a lid on sentiment and weigh on imports of investment goods,” said economist Ng Weiwen of ANZ Research in a note.

“I expect the trade balance to remain under pressure, with the current account surplus to halve in 2016 from 2015 on lower LNG prices as well as weaker commodity exports.”

LNG exports in January dropped 48 percent from a year earlier, while crude oil shipments declined 38 percent.

Imports in January rose 3.3 percent from a year earlier, picking up from 3.2 percent the previous month, but lower than economists’ forecast of 4.9 percent.

Imports in January rose 3.3 percent from a year earlier, picking up from 3.2 percent the previous month.

January’s trade surplus narrowed to RM5.39 billion (US$1.30 billion) compared with RM7.99 billion in December, pressured by falling oil and commodities prices but also from a strengthening ringgit in the first month of the year.

Ringgit effect

Malaysia reports its trade figures in ringgit, which sank more than 18 percent against the dollar last year, Asia’s worst performing currency. It gained 3.8 percent since the start of the year.

The ringgit pared its gains after the data, slipping to 4.1300 per dollar from 4.1260. It was last trading at 4.1270.

“The value of exports could have partly been depressed by the ringgit appreciation, and also due to seasonality effects such as the holiday period,” said Julia Goh, an economist at UOB Bank Malaysia.

“We expect the ringgit to rebound this year which may temper trade surplus gains, but it could be offset by lower import costs so the net gains should still be there. How significant its impact also depends on domestic demand.”

Exports to the EU grew 6.4 percent, while US exports rose 7.9 percent supported by higher exports of manufactured goods.

- Reuters