MAY TRADE SURPLUS SURGES TO RM10.4B

Performance likely to continue improving as economies gradually reopen

MALAYSIA’S trade surplus rose 14.7 per cent year-on-year to RM10.41 billion in May, the fourth time it breached the RM10 billion mark this year.

However, total trade was down 27.8 per cent year-on-year to RM114.96 billion last month.

The country had posted a deficit of RM3.6 billion in April as total trade declined 16.5 per cent during the month.

Economists believed the trade performance should improve in the remaining months of the year with the gradual reopening of economies globally.

Senior International Trade and Industry Minister Datuk Seri Mohd Azmin Ali said the RM10.41 billion trade surplus was the highest for the month of May since 2008.

He said the overall performance was similar to other regional countries, which also recorded lower trade growth due to the Covid-19 pandemic that had continued to slow economic activities globally.

For the month, exports contracted 25.5 per cent to RM62.69 billion while imports slipped 30.4 per cent to RM52.27 billion.

Compared to April, total trade, exports and imports slipped 13.7, 3.2 and 23.6 per cent, respectively.

Malaysia’s trade during the first five months declined 8.7 per cent to RM688.57 billion compared to the corresponding period last year.

Exports fell 9.7 per cent to RM366.16 billion and imports eased 7.5 per cent to RM322.41 billion in the first five months, resulting in a 23 per cent drop in trade surplus to RM43.75 billion compared with the same period last year.

Azmin said exports of rubber products, especially rubber gloves, registered a double-digit growth for the second consecutive month, rising 20.5 per cent, or RM461 million, last month.

Bank Islam chief economist Dr. Mohd Afzanizam Abdul Rashid expects better trade numbers in the coming months.

He said Malaysia’s month-onmonth export contraction had slowed to -3.2 per cent last month from -19.1 per cent in April.

There was a significant 23.6 per cent month-on-month import decline from 0.9 in April, suggesting that the reopening of the economy was at a very early stage.

“We believe the June figures should be better although the year-on-year comparison should remain negative,” he added.

Sunway University Business School economics Professor Dr Yeah Kim Leng concurred that the export contraction was likely to decline at a slower rate from this month.

This was on expectation that production and supply chain activities pick up pace in Malaysia and globally, especially among key trading partners.

“The recovery in trade, therefore, is expected to be gradual and tentative as some countries, especially the United States, are struggling to contain the Covid19 infection,” he said.

Yeah recalled that during the global financial crisis in 20082009, Malaysia’s monthly exports were in negative territory for a year.

The current global recession could result in a more prolonged slump for Malaysia with the recovery pace being dependent on how successful its trade partners allow full resumption of economic activities without igniting new infection waves, he added.