KUALA LUMPUR: Malaysia’s exports in May declined by 6.7% to RM60.45bil compared with the corresponding month last year impacted by subdued global demand, according to the International Trade and Industry Ministry (Miti).
May imports fell 7.2% making Malaysia’s total trade to decline 6.9% to RM115.4bil.
The country exports continued to contract during the month mainly dragged down by the mining goods sector valued at RM5.69bil and making up 9.4% the nation’s total exports.
Liquefied natural gas (LNG) fell by 47.9% followed by refined petroleum products (down by 28.3%) and crude petroleum (contracted by 22.1%).
Similarly, exports of palm oil and its related products dropped by 7.3%.
However, Miti said the country’s exports remained firm in May with a trade surplus of RM5.51bil. – a consecutive monthly trade surplus since November, 1997.
Overall, for the first five months of this year, Malaysia trade surplus totalled RM33.71bil with total exports and imports valued at RM304.08bil and 270.36bil.
Major exports for the period were still electrical and electronic products with a share of 35% of total exports at RM106.34bil, followed by LNG with 7.3% share, chemical and its related products at 7.1% and petroleum products at 7%.
AllianceDBS Research chief economist Manokaran Mottain highlighted that exports and imports growth in May came in better than the Bloomberg consensus expectations of -8.7% and -8.5% respectively.
Currently, there are some signs of weaknesses in the domestic manufacturing sector.
According to the Bloomberg consensus estimates, the forthcoming Industrial Production Index growth may likely moderate to 3% in May, down from the average 5.8% expansion in January to April this year
The external front outlook now remains challenging on the back of soft commodity prices and subdued growth prospects.
China remained as Malaysia’s largest trading partner accounting for 14.9% of its trade from January to May, 2015, reflecting an 2.7% increase year-on-year, followed by the United States with higher growth of 4.8% due to stronger demand.
Malaysia’s trade with the other Asean countries was at 27.2% with exports contributing RM85.43bil and imports RM70.56bil for the first five months of 2015.
Exports of refined petroleum products to the region were lower by RM7.3bil.
Although the regional currencies were generally weak due to due depreciation against the US dollar since second half of last year and partly due to diverging global monetary policies, Manokaran cautioned that a weak ringgit could potentially dampen some of the expected weak exchange rate boost to Malaysian exports competitiveness.
“For now, we maintain our full-year economic growth forecast at 5% . As net exports make up around 10% of Malaysia’s total GDP, a brighter external outlook in the second half of the year would be a much welcomed boost to overall growth,” he said.
