Malaysia's January exports plunged 27.8 percent year-on-year, hitting their lowest level since 2001 amid falling demand from key trading partners, according to official data released today.

The trade ministry said in a statement that exports fell to RM38.3 billion from a year ago while imports slumped 32 percent year-on-year in January.

malaysia stock exchange market klse 141008 04 The total trade was worth RM67.77 billion, a decrease of 29.7 percent from a year ago, but Malaysia did manage to record a trade surplus of RM8.83 billion for the month.

Ratings agency RAM Holdings chief economist Yeah Kim Leng said the decline in exports was the sharpest drop in eight years.

"This is the worst since the 25 percent decline in the exports for electrical and electronic products in 2001 during the global IT slump," he told AFP .

"The sharp contraction is the result from both a sharp drop in demand and lower prices. Malaysia is now feeling the brunt of the global slump in exports," he said.

On brink of recession

The trade ministry said the sharp fall in exports was mostly due to lower demand for electrical and electronic products, which account for one-third of Malaysia's total exports to key markets in China, Japan, Europe and the United States.

In December, Malaysian exports slumped 14.9 percent, compared with just 4.9 percent in November.

On Wednesday, an influential think tank said Malaysia was on the brink of a recession as falling demand hits exports and manufacturing with growth expected to reach just 0.5 percent for the year.

The Malaysian Institute of Economic Research (MIER) had in January already slashed its growth forecast to 1.3 percent from an earlier 3.4 percent, while the government is sticking to its figure of 3.5 percent growth for 2009.

Official data released last week showed Malaysia's economic growth slowed to just 0.1 percent in the fourth quarter of 2008, hit by falling exports and manufacturing as demand continues to evaporate.