Exports and imports down in February
The Star Online (06/04/2018) - PETALING JAYA: Malaysia’s exports unexpectedly declined by 2% year-on-year (y-o-y) in February, significantly below market expectations of an 8% growth, mainly due to a shorter working month and the high-base effect from February 2017.
Imports also declined by 2.8% during the period, against an expected 7.1% growth.
The data marks the first decline in the country’s exports and imports since November 2016.
While the trade surplus of RM9bil for the month under review was above market expectations of RM8.5bil, it was still lower than the RM9.7bil achieved in January.
Despite the fall in exports and imports, MIDF Research expects the country’s external trade performance to rebound in the upcoming months.
The research house said this would lead to an overall easing path in 2018 amid the upbeat momentum in global trade activities.
“Underpinned by optimistic signs of key global indicators and gradual recovery in commodity prices, we foresee Malaysia’s exports to expand by 9.3% this year.
“The moderating pace is mainly due to an unfavourable base effect and in tandem with the expectation of a slight slowdown in overall business performance,” it said.
However, it cautioned that escalating trade tensions between the US and China could present a serious threat to global trade.
On a y-o-y basis, Malaysia’s exports fell 2% to RM70.3bil from RM71.8bil – mainly weighed down by commodities, with palm oil and palm oil-based products, liquefied natural gas as well as timber and timber-based products being the major contributors to the drop.
Electrical and electronic products, which accounted for 35% of total exports, also recorded a slight decline of 0.1% to RM24.6bil.
Nomura Global Markets Research noted that while the decline in exports was partly due to the Chinese New Year holiday effect, exports also fell by 8.9% on a month-on-month seasonally adjusted basis, following a 12.4% increase in January.
“Nonetheless, combining January and February to account for the Chinese New Year effect, export growth remained solid at 7.8% y-o-y, albeit slowing from 12.4% in the fourth quarter of 2017,” it said.