The trade ministry said overseas shipments, the main engine of the country's economy, came in at posted 55.07 billion ringgit ($18.1 billion), with petroleum, and iron and steel providing most support.

Yeah Kim Leng, chief economist with financial research firm RAM Holdings told AFP the slowdown in exports would need to be countered by bolstering domestic demand if the government is to achieve its goal of 4.0-5.0 percent growth this year.

"It looks like the slowdown in Europe has translated into a sharp fall in our exports. The more worrying thing is our exports to China, which traditionally has supported our economy, have also declined."

China's huge economy, which many regional nations rely on to boost their own growth, is witnessing a slowdown as its own exports suffer from the ongoing debt crisis in Europe as well as the stuttering recovery in the United States.

"We expect Malaysian exports to experience very weak growth in the first half of this year," Yeah added.

Exports to China plunged 12.2 percent, while those to the European Union sank 14.5 percent.

Malaysia's major export markets in January were Japan, Singapore, China and the United States.