KUALA LUMPUR, Sept 5 — Malaysia’s exports in July posted their weakest performance in more than a year, well below expectations, as demand from China and Japan for key goods slumped, while imports shrank on lower domestic consumption.
Exports rose just 0.6 per cent from a year earlier, the weakest since June 2013, while imports fell 0.7 per cent, the first decline since May last year. A Reuters poll had forecast a 6.2 per cent rise in exports, and a 5.0 per cent gain in imports.
The trade surplus for the month was RM3.64 billion, compared to RM3.97 billion in June, largely in line with the forecast of 11 economists of RM4.0 billion.
Exports to China - Malaysia’s largest trade partner - fell 14.4 per cent from a year earlier on lower shipments of metal, rubber, palm oil, chemical products as well as electrical and electronic products. Exports of liquefied natural gas dropped 22.9 per cent from a year earlier, due to lower volumes sent to Japan.
“There could have been some plant maintenances done which affected the LNG and crude oil exports,” said Barclays Research economist Rahul Bajoria.
“Overall there may be a pickup in exports later this year but it’s not going to be a much bigger figure,” he said.
The trade ministry, in a statement, said that “slower domestic economic activities” in China had contributed to the fall in exports to that pivotal market.
Exports of the country’s mainstay electrical and electronic products dipped by 1 per cent due to lower demand from Singapore and China. Imports were pulled lower by a 9 per cent fall in consumption goods and a 17.9 per cent plunge in capital goods.
ANZ Research said in a note that Malaysia’s trade surplus, which has been on a declining trend this year, is expected to keep narrowing. It said this was partly due to the ringgit’s recent strengthening against the US dollar, but that exports would remain supported “by improving global capex demand (for electronics) and increases in petrochemical production.” — Reuters
