(AFP) The country's trade surplus in August rose 23 percent from a year earlier as imports fell sharper than exports, the Statistics Department said today.

August's RM5.9 billion surplus compared with RM4.8 billion a year earlier, the department said in a statement.

It was the country's 46th consecutive trade surplus since November 1997.

The department attributed the surplus to a sharper fall in imports by 24.9 percent to RM22 billion, while exports dropped by 18 percent to RM27.9 billion.

Electrical and electronic products remained the top export earner, accounting for 55.3 percent of August exports, but still declined 25.4 percent year-on-year to RM15.4 billion.

Imports of intermediate and capital goods - used mainly in producing goods for export and the local market - made-up 86.5 percent of total imports but fell 27.7 percent to RM19 billion.

For the first eight months this year, the trade surplus fell to RM35.9 billion from RM37.6 billion a year earlier, as exports dropped 7.7 percent to RM223.8 billion while imports slid 8.3 percent to RM187.9 billion.

Almost 21 percent of the country's exports go to the United States.

Further effect

Economists have predicted that trade will be affected further by a renewed slowdown in the US after the September 11 terrorist attacks.

The government last month unveiled a RM4.3 billion stimulus package to shore up the economy, on top of a three-billion-ringgit supplementary budget announced in March.

The influential Malaysian Institute of Economic Research (MIER) said today the additional spending would "provide some relief" but was unlikely to have significant impact on economic activities.

MIER executive director Mohamed Ariff told reporters the effectiveness of the package would depend on how the funds were spent. He said there were concerns of leakage in the system via imports of raw materials and foreign labour.

Mohamed Ariff reiterated that MIER would cut its growth forecast of 2.2 percent for 2001 as that estimate was "not tenable" now.

"We'll have to brace ourselves for a rough ride," he added.

The MIER has ruled out a recession but predicted the economy would contract in the third quarter.

The government will for a second time revise its official growth forecast for this year when it unveils its 2002 budget on October 19. In March it cut its growth estimate from seven percent to between five and six percent. The economy grew 8.5 percent last year.