DoSM: Malaysia’s current account surplus up 17pc to RM14.4b in Q2

A Malaysia ringgit note is seen in this illustration photo June 1, 2017. — Reuters pic
A Malaysia ringgit note is seen in this illustration photo June 1, 2017. — Reuters pic

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KUALA LUMPUR, Aug 13 — Malaysia’s Current Account Balance (CAB) posted a surplus of RM14.4 billion in the second quarter of 2021 (Q2 2021), rising by 17.2 per cent from RM12.3 billion in Q1 2021, said the Department of Statistics Malaysia (DoSM).

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the widening current account surplus was primarily driven by the favourable performance in Goods, even though the Services deficit continued to grow since Q2 2020 amidst the Covid-19 outbreak.

“In Q2 2021, the Goods account increased by 11.1 per cent to record a higher surplus of RM40.7 billion compared to RM36.6 billion in Q1 2021.

“The substantial performance was driven by the higher exports of goods at RM244.0 billion — an increase of RM18.5 billion from the previous quarter,” he noted.

Main exports were electrical and electronics (E&E), as well as petroleum and rubber-based products, principally to China, Singapore and the United States (US), he said.

Mohd Uzir said imports of goods also showed a similar upward trend, rising by RM14.5 billion to RM203.4 billion in Q2 2021 compared to Q1 2021, with main imports sourced from China, Singapore and Japan, and noted that the increase was mainly contributed by intermediate goods.

The chief statistician also highlighted that the current account surplus in Q2 2021 was also underpinned by the lower deficit in secondary income, which contracted to RM1.4 billion from RM3.6 billion in the preceding quarter.

This was due to higher receipts from abroad, while payments had decreased as foreign remittance had reduced following the decline in the number of foreign workers, he said.

Meanwhile, in terms of Services trade, imports stood at RM36.5 billion while exports were at RM21.1 billion in Q2 2021, resulting in a wider services deficit of RM15.4 billion versus RM15.0 billion in Q1 2021, mainly led by travel and transport.

He said that Malaysia’s borders remain closed for international tourist arrivals as the unprecedented Covid-19 pandemic worsened starting from mid-May this year.

“This had weighed down on Travel, resulting in a higher deficit of RM3.6 billion in the current quarter.

“Similarly, the deficit in Transport also increased by 6.4 per cent quarter-on-quarter to RM8.1 billion, primarily owing to the higher payments on freight activities which were in line with the increase in imports of goods,” he said.

Mohd Uzir said the performance of information and communications technology-related services had improved with the adoption of technology-driven work practices in the new normal brought by the pandemic.

Additionally, personal, cultural and recreational services recorded higher receipts in Q2 2021 as e-sports became more popular among the youngsters, he said.

Meanwhile, during the quarter under review, the Primary Income account recorded a deficit of RM9.5 billion.

“Foreign companies in Malaysia earned a higher income of RM28.7 billion for this quarter, particularly from direct investment in manufacturing and financial sectors.

“Concurrently, Malaysian companies abroad also registered a higher income of RM19.3 billion, due to a significant increase in portfolio investment,” he said.

Mohd Uzir added that the Financial account registered a net outflow of RM7.0 billion in Q2 2021 from a net inflow of RM16.0 billion in the previous quarter, due to Other Investments which posted an outflow of RM30.5 billion, driven by higher interbank repayments abroad.

Foreign Direct Investments (FDI) registered an inflow of RM8.2 billion for this quarter, principally in the form of equity and investment fund shares.

“Manufacturing remained as the main sector for foreign investment in Malaysia, followed by financial and mining, particularly from Japan, Indonesia and the US.

“Concurrently, Direct Investment Abroad (DIA) registered an outflow of RM4.0 billion contributed by equity and investment fund shares,” he said.

He highlighted that Malaysian companies overseas were mostly involved in the financial, manufacturing and information sectors, with top destinations being the United Kingdom, Indonesia and Canada.

On Accumulated Investment, he said as at the end of Q2 2021, FDI increased by RM16.9 billion to  RM730.3 billion, while DIA stood at RM537.7 billion.

“Malaysia’s International Investment Position registered a higher net asset of RM112.6 billion, compared with RM106.4 billion in the previous quarter.

“International reserves edged up to RM461.5 billion from RM450.8 billion at the end of Q1 2021,” he added. — Bernama

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