The ratings agency said the data provided optimism that external demand would cushion the downturn in the first quarter of 2021.

“However, much depends on external conditions, which are currently unstable.

“Lockdowns in Europe and the US are still in place even as countries race to roll out vaccines, while within Asia, parts of China, Thailand, South Korea and Japan have reinstated restrictions,” it said in a statement.

Malaysia’s trade balance rose to RM20.7 billion in December, up from RM16.8 billion in November.

Exports rose by 10.8% year-on-year, caused by a 47.1% surge in agriculture and a 12.4% increase in manufacturing.

“Encouragingly, imports increased for the first time in nine months despite the strict movement control measures imposed on almost all states,” it said.

Moody’s said that although the Asia-Pacific region managed to subdue its first wave of the virus relatively quickly thanks to strict lockdowns, it appears that widespread vaccine distribution is necessary for a sustained rebound in the region.

The ratings firm has affirmed Malaysia’s local and foreign currency long-term issuer and local currency senior unsecured debt ratings at A3 with a stable outlook.

It said last Thursday that the rating affirmation is underpinned by its expectation that Malaysia’s medium-term growth prospects would remain strong, and the country’s macroeconomic policymaking institutions would continue to be credible and effective, providing resilience to the sovereign credit profile.