ʻMONTHLY TRADE SURPLUS MAY NARROW IN JULYʼ

KUALA LUMPUR: Moody’s has forecast Malaysia’s monthly trade surplus likely to narrow in July to RM6.7 billion from the RM9.9 billion surplus in June, driven by the seasonal effects of Ramadan and Eid-al-Fitr.

According to the recent Moody’s Asia-Pacific Economic Review, it noted that beyond the religious festivities, Malaysian tech exports were doing well spurred by buoyant global demand.

“Tech exports are helping pick up the slack from soft oil shipments from the sustained lull in prices,” it said.

Malaysian manufacturing and the external sector are reaping the benefits of a large integrated circuit industry, which makes up around 30 per cent of merchandise exports, said Moody’s.

Meanwhile, the credit research firm said China’s external trade activity was growing at a robust pace due to recovering global demand and steady domestic demand.

“Exports of tech products will continue to increase since global tech demand is strong, and this is lifting the trade surplus.

“Further gains are expected as the holiday season draws near, as foreshadowed by higher imports of tech components,” it said.

Moody’s said consumer price inflation in China had been inactive on account of low energy costs and stabilising housing-related inflation.

“A rebound in food inflation is creating upward price pressure, but outside of food, inflation is stable. Producer price inflation is cooling now that domestic commodity suppliers have ramped up output,” it added.

Consumer prices likely rose 1.6 per cent year-on-year last month, after a 1.4 per cent increase in July. Ayisy Yusof