3 Q current account balance surplus narrows to RM11.6 bln

KUALA LUMPUR: Malaysia’s Current Account Balance (CAB) recorded a surplus of RM11.6 billion in the third quarter of 2021 (3Q21) compared to RM14.4 billion in the previous quarter (2Q21), the Department of Statistics Malaysia (DOSM) said.

Chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the narrowing current account surplus in 3Q21 was led by higher deficit in the income accounts.

“The primary income account recorded a higher deficit of RM11.3 billion against RM9.5 billion in 2Q21, mainly attributed to foreign companies in Malaysia earning higher income of RM26.3 billion, an increase of 3.3 per cent from the preceding quarter, particularly in direct investment.

“These companies were primarily involved in the manufacturing and financial sectors where the income was mostly channelled to Singapore, the Netherlands and the United States (US),” he said in a statement.

Meanwhile, Malaysian companies abroad earned a lower income of RM18.0 billion compared to RM19.3 billion in the previous quarter, especially in other investments.

“Most of these companies were located in Indonesia, the US and Singapore, principally engaged in the financial and mining sectors.

“Furthermore, the secondary income account posted a higher deficit of RM3.1 billion against RM1.4 billion last quarter.

“This account recorded lower receipts of RM4.3 billion owing to lower settlements received from abroad, while payments were RM7.4 billion in this quarter,” he added.

Mohd Uzir noted that Malaysia’s current account surplus was still largely

The primary income account recorded a higher deficit of RM11.3 billion against RM9.5 billion in 2Q21, mainly attributed to foreign companies in Malaysia earning higher income of RM26.3 billion, an increase of 3.3 per cent from the preceding quarter, particularly in direct investment. Datuk Seri Dr Mohd Uzir Mahidin

buoyed by higher net exports in goods account with RM41.2 billion against RM40.7 billion in the previous quarter.

“Compared with 2Q21, the export of goods decreased at a slower rate than the imports that eventually contributed to higher net exports in 3Q21.

“Exports declined 3.1 per cent quarter-on-quarter (q-oq) to RM236.6 billion, mainly in electrical and electronics (E&E), chemicals and petroleum-based products; largely to China, Singapore and the US,” he said.

He said imports of goods also fell by 3.9 per cent q-oq to register RM195.4 billion against the preceding quarter due to a downward trend in the imports of intermediate, capital and consumption goods, mainly from China and Japan.

Mohd Uzir said in 3Q21, services trade improved slightly after it recorded an increasing deficit for the past seven consecutive quarters since the end quarter of 2019.

Services logged a deficit of RM15.2 billion compared to RM15.4 billion in the preceding quarter of 2021, partially offset by transport, other business services and construction components, albeit travel remains in the negative trend by posting a higher deficit of RM3.7 billion as against RM3.6 billion deficit in the second quarter of 2021 following border closure for international tourist arrivals, he said.

In 3Q21, the increase in exports of services was 1.9 per cent q-o-q to RM21.5 billion, faster than imports which rose marginally by 0.5 per cent to RM36.7 billion.

Transport posted a lower deficit of RM8.0 billion compared to RM8.1 billion in the preceding quarter, predominantly driven by the increase in exports of freight activities.

“A similar trend was noticed in other business services with a lower deficit of RM1.1 billion, improved by 7.1 per cent against the previous quarter, mainly in business and management consulting activities.

“Simultaneously, construction posted a surplus of RM19.6 million from a deficit of RM245.1 million in the 2Q21 due to lower payments for existing projects in this country following the implementation of the Movement Control Order starting May 2021 to contain Covid-19,” Mohd Uzir said.

The chief statistician also highlighted that financial account turned around to register a net inflow of RM22.8 billion in 3Q21 from a net outflow of RM7.0 billion in Q2 2021

“This was mainly attributed to inflows in direct investment and other investments of RM17.6 billion and RM8.8 billion, respectively.”