Malaysia records RM2.9 billion surplus in BOP in third quarter

KUALA LUMPUR: Malaysia’s overallbalanceofpayments(BOP) registered a surplus of RM2.9 billion in the third quarter (3Q) of 2017 from RM2.7 billion in 2Q.

Errors and omissions, which included the revaluation changes on reserves, amounted to minus RM8.5 billion or minus 1.9 per cent of total trade, according to Bank Negara Malaysia in a statement.

It said the current account surplus had widened to RM12.5 billioncomparedtoRM9.6billionin the preceding quarter, accounting for 3.7 per cent of the gross national income (GNI) compared to 3.0 per cent previously.

This was primarily due to a larger goods surplus which had offset the higher deficits in the income accounts and sustained deficit in the services account, it said.

“The goods surplus widened to RM31.7 billion in 2Q compared with RM27 billion in 2Q as exports grew at a faster pace, while intermediate and capital imports moderated from 2Q17,” it said.

BNM said the deficit in the services account was broadly sustained at RM4.9 billion compared with RM5 billion previously as the travel account registered a bigger surplus at RM9.2billion,supportedbyhigher tourist arrivals and spending amid major sporting events held during the quarter.

“This improvement was partly offset by a larger deficit in construction services of RM3.3 billion in 3Q, reflecting the mainly lower receipts due to the near completion of the projects in Qatar and India,” it said.

Meanwhile, it said, the higher deficit in the primary income accountofRM8.6billioncompared to a deficit of RM8.2 billion in 2Q, was largely attributable to lower income generated by Malaysian firms investing abroad, which stood at RM11.4 billion compared withRM12.4billionintheprevious quarter.

“The income earned by foreign investors in Malaysia during the period remained sizeable at RM18.9 billion, and the deficit in thesecondaryincomeaccountwas larger at RM5.7 billion compared with RM4.2 billion recorded in 2Q17,” it said.

BNM said the outward remittances amounted RM9.5 billion, driven by foreign worker remittances, while inward remittances were lower at RM3.8 billion compared with RM4.4 billion recorded earlier.

Intermsofthefinancialaccount, the net outflow of RM1.2 billion as against a net inflow of RM7.3 billion in 2Q, was due to the higher inflows of long-term foreign direct investments (FDIs) and sustained foreign inflows into domestic portfolio assets being offset by portfolio investments abroad by residents and outflows arising from banks’ liquidity and treasurymanagementoperations, it said.

“The direct investment account (DIA) turned around to register a net inflow of RM6.2 billion against a net outflow of RM7.1 billion in 2Q as FDI inflows more than offset outflows of DIA during the quarter.

“FDIs rose to RM11.2 billion against RM8.3 billion previously due mainly to higher injections of equity capital and reinvestment of earnings from parent companies, channelled mainly into the real estate activities sub-sector, followed by the mining and manufacturing sectors,” it said.

It said DIA by Malaysian companies declined to RM5 billion against a net outflow of RM15.4 billion in 2Q, on account of lower capital injections and earnings retained by subsidiaries abroad for reinvestment, channelled mainly into the financial services sub-sector and the manufacturing sector.

BNM said the portfolio investment account registered a net outflow of RM5.1 billion as against a net inflow of RM16 billion in 2Q, of which portfolio investments by non-residents accounted for the inflow of RM3.7 billion from RM18.8 billion previously. — Bernama