KUALA LUMPUR: Malaysia’s exports likely grew in July because of the weak local currency, economists say.
Exports likely grew 3.2% in July from a year earlier, according to the median forecast from a survey of seven economists by The Wall Street Journal. In June, exports grew 5% year-over-year.
The official report is due Friday at 0400 GMT.
“Exports are receiving a boost from the weak currency, although soft demand for energy-related products is preventing even stronger gains,” Moody’s Analytics said. The Malaysian ringgit has recently fallen to 17-year lows against the U.S. dollar.
The fall in prices of commodities such as crude oil and natural gas likely led to the expected on-month decline in the July exports. While crude accounts for less than 5% of Malaysia’s total exports, the country is the world’s second- largest exporter of natural gas after Qatar, with shipments of liquefied natural gas accounting for about 17% of total exports.
“The outlook for commodity exports remains weak,” said Weiwen Ng, an economist said. “Lower liquefied natural gas prices would put pressure on the trade surplus given that the lion’s share of the trade surplus has been from LNG, where net trade account for 5.7% of GDP respectively in 2014.”
Imports probably fell 1.1% in July when compared with the same month a year earlier, the same WSJ poll showed. In June, imports declined 1.5% year-over-year.
The trade surplus likely narrowed to 6.00 billion ringgit ($1.43 billion) from 7.98 billion ringgit in June.
