July trade surplus at 10-year low, exports slump
Malaysia’s trade surplus slumped to RM3.6 billion (US$1.16 billion) in July, its lowest in more than a decade, as the South-East Asian nation’s exports to the European Union and China fell sharply amid a global slowdown.
Malaysia’s trade surplus slumped to RM3.6 billion (US$1.16 billion) in July, its lowest in more than a decade, as the South-East Asian nation’s exports to the European Union and China fell sharply amid a global slowdown.
The surplus fell well short of a median forecast for a RM9.1 billion surplus given by a Reuters poll of 17 analysts, and was the lowest since April 2002.
Exports fell 1.9 percent from a year ago, confounding expectations for a 3.8 percent rise, while imports rose 9.5 percent, compared with a 5.1 percent forecast.
Exports of electronic products, which are one-third of Malaysia’s total, fell 4.8 percent in July from a year earlier, while exports of liquefied natural gas fell 26.8 percent.
Exports of palm oil, chemicals, crude oil all slumped more than 25 percent.
“Malaysia can no longer count on commodities and resource-based products to offset the slowdown in electronic goods,” Azrul Azwar Ahmad Tajudin, chief economist at Bank Islam, said.
With the slowdown in Europe biting harder, Azrul said he expects the slump in exports to persist over coming months.
In July, Malaysia’s exports to the EU dropped 20.6 percent from a year earlier, while exports to China slipped by 13.1 percent and eased 1.4 percent to Japan.
Partly offsetting that, exports to the United States rose 14.6 percent.
Malaysia’s economy grew 5.4 percent in the second quarter compared with a year ago, helped by a jump in private and government investments.
Yesterday, Malaysia’s central bank left its policy rate unchanged for the eighth time in a row, saying domestic demand was helping shore up the economy amid a weakening external sector. The central bank said it expects domestic demand to continue to support economic growth.
A slew of public holidays are likely to have dented trade figures in August, said Lee Heng Guie, Head of Economic Research at CIMB, Malaysia’s second largest bank.
“Commodity prices also remain uneven at this juncture,” Lee added.
In June, exports had risen 5.4 percent from a year earlier, while imports had increased 3.6 percent.
- Reuters
