Ex­port growth may nor­malise at 8-15pc

New Straits Times - - Business -

KUALA LUMPUR: Malaysia’s ex­port growth is likely to nor­malise at 8.0 to 15 per cent this year, say econ­o­mists.

The pro­jec­tion comes af­ter data showed yes­ter­day that ex­ports grew by 10 per cent in June, lower than mar­ket ex­pec­ta­tions.

The In­ter­na­tional Trade and In­dus­try Min­istry said im­ports grew 3.7 per cent in the month and trade sur­plus was at RM9.88 bil­lion.

Com­pared with May, to­tal trade, ex­ports and im­ports were lower by 11.1, 8.0 and 14.5 per cent, re­spec­tively.

For the se­cond quar­ter, ex­ports rose 20.6 per cent from the same pe­riod last year and im­ports in­creased 19.1 per cent.

The min­istry said for the first half, ex­ports grew 21 per cent to RM451.05 bil­lion and im­ports ex­panded by 23.3 per cent to RM408.12 bil­lion.

But re­search houses said the slower growth pace in June was not a ma­jor cause for con­cern as it was a shorter work­ing month and there were plant shut­downs for main­te­nance re­pairs.

MIDF Re­search had ex­pected the slow­down in ex­port growth due to high-base ef­fects.

“June’s ex­port num­ber is 10 per cent higher year-on-year by 1.8 per cent points from our 11.8 per cent es­ti­mated growth.”

The firm kept its 2017 fore­cast at 14.5 per cent.

Al­liance Bank said elec­tri­cal and elec­tron­ics (E&E), and oil and gas sec­tors, which had con­trib­uted 5.8 and 2.0 per cent to the June data, re­spec­tively, re­mained ex­pan­sion­ary with dou­ble-digit year-on-year growth for the eighth con­sec­u­tive month.

“We ex­pect the E&E sub-sec­tor to re­main the main driver of ex­port growth,” it said, adding that the World Semi­con­duc­tor Trade Statis­tics had pro­jected the semi­con­duc­tor mar­ket to grow 11.5 per cent this year.

How­ever, the June Nikkei Pur­chas­ing Man­agers’ In­dex fell to its all-time low of 46.9 and this may be seen as a head­wind for the man­u­fac­tur­ing sec­tor in the up­com­ing months, the bank said.

“We ex­pect ex­port growth to nor­malise in the se­cond half to 8.0 to 9.0 per cent,” it said.

UOB Bank econ­o­mist Ju­lia Goh said although June’s growth was the slow­est in six months, this was likely due to the Hari Raya hol­i­day. “Malaysia’s ex­port per­for­mance was gen­er­ally in line with re­gion,” it said.

It ex­pects ex­port growth to mod­er­ate in the se­cond half amid ebbing mo­men­tum in Asia’s man­u­fac­tur­ing ac­tiv­ity, end­ing of the cur­rent elec­tron­ics cy­cle with next wave of smart­phone launches later this year, and lower com­mod­ity prices.

Ex­port growth is ex­pected to av­er­age 7.4 per cent in the se­cond half, bring­ing full-year growth to 14.2 per cent. Rupa Damodaran

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