KUALA LUMPUR: RAM Ratings expects Malaysia’s export growth to slow down in June after the jump in May due to slower demand for exports from China and Singapore, after consecutive months of rapid build-up in capacity and re-stocking. The ratings agency said in a statement that it expected June export growth to be a healthy 17.5% though slower than the steep 32.5% in May. “Moreover, a high-base effect arising from the rebound in growth in June 2016 also contributed to the moderation,” it said.
RAM Ratings also expected imports to expand at a slower pace of 12.6% which is nearly half of the preceding month’s 30.4%. “Imports are projected to decelerate in line with the moderation in exports. The upside support from re-exports vis-à-vis overall import growth in May is unlikely to carry through to June, thus further reducing its momentum. As such, the trade balance is projected to widen to RM9.4bil in June,” it said. Demand for machinery and transport equipment had driven the robust expansion in exports to Malaysia’s key markets. It also pointed out the growth of exports to several key partners also charted multi-year highs in May. “Nevertheless, such elevated levels may not be sustainable as demand for input components by foreign producers will ease once their inventory requirements have been fulfilled and the current electronics growth cycle comes to an end after the release of the next wave of smartphones,” it said.
