RAM Rating: Malaysia’s imports, exports expected to contract in Nov

File picture of a worker inspecting a container at North Port in Port Klang outside Kuala Lumpur. — Reuters pic
File picture of a worker inspecting a container at North Port in Port Klang outside Kuala Lumpur. — Reuters pic

KUALA LUMPUR, Jan 2 ― Malaysia’s imports and exports are expected to contract at 4.7 per cent and 4.4 per cent respectively in November, resulting in a RM8.3 billion trade surplus for the month.

RAM Rating Services Bhd in a statement today said the decline is slower than the respective 8.7 per cent and 6.7 per cent decline in October, as the continued lacklustre showing is underlined by the persistently sluggish pace of global trade and subdued demand.

“The conclusion of the “phase one” trade deal between the US and China has calmed fears of further deterioration in global trade conditions.

“While still pending signatures on the dotted line, both sides have suspended the tariffs scheduled for December 15 and reduced the existing tariffs on a selection of goods,” it said in a statement today.

It added that the relaxation of stiff tariffs by the US and China signals a future reduction in the potential trade diversion benefits enjoyed by Malaysia.

“The reduction of tariffs by the US, presumably on the September 1, 2019 tranche of goods, may encourage the resumption of Chinese purchases that had earlier been diverted to other markets.

“Such beneficiaries include Malaysia given its competitiveness in the production of this particular basket of goods,” it said. ― Bernama

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