Malaysia’s export growth to improve in 2017

KUCHING: Malaysia’s exports are expected by RHB Research Institute Sdn Bhd (RHB Research) to pick up modestly to two per cent in 2017. According to RHB Research, exports bounced back into a growth of 7.8 per cent year on year (y-o-y) in November, from a decrease of 8.6 per cent in October and compared with a three per cent drop in September. “The steep decline in October’s figure was weighed down by a high base effect,” the research house in an economic update.“The reversal was mainly on account of a sharp rebound in shipments of non-electronics and electrical (E&E) products and a pick-up in E&E exports.” It added that this was also helped by a smaller contraction in shipments of commodity exports. The research house noted that stripping out the currency factor and measured in US dollar terms, exports similarly reversed into a growth of 7.1 per cent y-o-y during the month, after declining 6.7 per cent in October and 1.8 per cent in September.

Consequently, RHB Research expected the country’s exports to pick up modestly to two per cent in 2017, from an estimated growth of 0.5 per cent in 2016 and 1.6 per cent in 2015. This was on account of a gradual improvement in world merchandise trade volume, on the back of sustained global growth and resilient demand for E&E goods and a recovery in commodity exports. On another note, RHB Research pointed out that although the trade surplus narrowed in November, it remained large. Hence, the research house expected the trade surplus to grow at sustained pace heading into 2017.

You might also like

lamic banking assets reach Rs14.47 trillion, sector share rises to 23%

07/03/2026

Shippers see temporary lull in exports

05/02/2020

The research house noted that this would likely contribute to a surplus in the current account in the balance of payments, which is expected to improve slightly to RM20.2 billion or 1.6 per cent of gross domestic product (GDP) in 2017, from an estimate of RM15.9 billion or 1.3 per cent of GDP in 2016. “As it stands, the exports of non-E&E products (52.6 per cent share of total exports) surged by 35 per cent y-o-y in November, reversing from a decline of 11.5 per cent in the previous month, and compared with a drop of 2.8 per cent in September,” RHB Research said. “This was mainly reflected in the rebound in shipments of chemical products, optical and scientific equipment and machinery apparatus during the month, after they fell in October.”

RHB Research highlighted that likewise, exports of E&E products (36.7 per cent share of total exports) gained pace to 13.2 per cent y-o-y in November, from a 1.4 per cent increase in the previous month, and compared with a tick-up of 0.5 per cent in September. It said that this was on account of a quicker growth in the shipments of office machines and auto data processing equipment (largely computers) and of electronic components and parts (largely semiconductor products) during the month, while exports of audio visual equipment fell by a narrower margin. RHB Research noted that at the same time, exports of commodity products (which account for a 11.6 per cent share) contracted by a narrower margin of 1.8 per cent y-o-y in November, from decreases of 22.7 per cent in October and 13.4 per cent in September.

The research house further noted that this was mainly reflected in the smaller magnitude of contractions in the shipments of crude oil and liquefied natural gas (LNG), while shipments of palm oil surged during the month, on firmer prices. On manufactured exports, RHB Research highlighted that as a whole, it reversed into a growth of 7.9 per cent y-o-y in November, following a decline of 6.7 per cent in October and compared with a drop of 1.2 per cent in September. “In terms of markets, the recovery in November’s exports was led by rebounds in shipments to the EU, US, and the Asean region,” the research house said. “At the same time, shipments to China gained pace, while shipments to Japan contracted by a smaller margin.”

The research house noted that in the same vein, imports reversed into a growth of 11.2 per cent y-o-y in November, after declining by 6.6 per cent in October and 0.1 per cent in September. It further noted that this was mainly attributed to a broad-based rebound in imports of intermediate, capital and consumer goods during the month. “On the same note, imports in US dollar terms reversed into a growth of 10.5 per cent y-o-y in November, after contracting by 4.6 per cent y-o-y in October,” it said. Meanwhile, RHB Research said that as imports grew at a quicker pace than exports on a month on month (m-o-m) basis, the trade surplus narrowed to RM9 billion in November, from RM9.8 billion in October. “Cumulatively, the trade surplus was lower at RM78.5 billion in the January-November 2016 period, compared to a surplus of RM83.2 billion in the corresponding period of last year,” the research house added.