LARGEST TRADE SURPLUS IN 10 YEARS
But analysts warn Q4 may be vulnerable after September exports took a hit
MALAYSIA’S trade surplus grew 15.3 per cent to RM100.86 billion in the JanuarySeptember period from RM87.47 billion in the same period last year.
This was the largest JanuarySeptember trade surplus in the last 10 years, said analysts.
However, they cautioned that the trade performance would be quite vulnerable in the fourth quarter after exports saw the largest monthly decline since October 2016.
“Export contraction fell to the lowest rate in three years,” said MIDF Research on the latest trade data released by the International Trade and Industry Ministry yesterday.
Malaysia’s total trade in September decreased 2.7 per cent year-on-year to RM147.07 billion.
This was brought about by lower trade with Singapore, Hong Kong, Taiwan, Australia, Thailand and the Netherlands.
On the other hand, higher trade was registered with China, India, South Korea, the United States and Saudi Arabia.
The ministry said September’s trade surplus was valued at RM8.34 billion, a decline of 46.5 per cent compared with the same month last year. This marked the 263rd consecutive month of trade surplus since November 1997.
MIDF Research said in September, exports contracted 6.8 per cent year-on-year, the hardest fall since October 2016.
“The second consecutive month of negative growth was due to weak performances in all major sectors,” it said, adding that higher base effect would influence the overall performance in the fourth quarter of this year.
“Nevertheless, we expect commodity-based sector products, particularly liquefied natural gas exports, to offset the less favourable impact from the trade war in the second half.”
MIDF Research said for the first nine months of the year, export growth averaged 1.1 per cent year-on-year.
In terms of absolute value, the monthly average so far this year stood at RM80.9 billion, lower than RM83.7 billion last year.
“We expect a further drop in export growth last month due to the high base effect. In addition, a continuous decline in imports of capital and intermediate goods indicates weak prospects for future exports.
“With trade faltering globally as a result of rising protectionism and loss of momentum in some major economies, especially in Europe, we do not foresee a huge comeback in the second half of this year,” it added.