RAM: Exports may grow moderately at 20% in August

KUALA LUMPUR: RAM Ratings expects Malaysia’s exports to record a moderate 20% growth in August 2017.

This will come amid the dissipation of the low-base effects and the seasonal boost for domestic industrial output, which has driven the preceding month’s expansion of 30.9%.

In a statement, the rating agency said the demands from China and Singapore are expected to remain the driver for growth in August.

“We also anticipate import growth to moderate to 15.4%, given its strong correlation as a key input factor for exported goods amid Malaysia’s close linkage with the global value chain,” it said.

RAM expects domestic restocking cycles to decelerate after the surge early this year.

“As such, import demand may be dampened as the need to build inventories reduces with respect to moderating demand for exports.

“In this scenario, the trade surplus is projected to come in at RM13.1bil in August,” it said, adding that imports and exports growth is expected to keep expanding at a healthy pace.

The growth would be facilitated by the resilient pace of industrial activity and upbeat global demand, although the momentum would likely moderate towards the end of this year as the higher-base effects from the second half of 2016 kicked in. — Bernama