Malaysia: Growth in merchandise exports eases notably in October
Merchandise exports grew 1.1% in annual and USD terms in October, markedly softer than September’s 14.5% jump. Similarly, export growth in ringgit terms eased to 0.2% in October from September’s 13.6%, beating market expectations of a 0.8% contraction. October’s result largely reflected higher shipments of manufactured goods and palm oil.
Meanwhile, merchandise imports declined more sharply, dropping 5.1% on an annual basis and in USD terms in October (September: -2.8% yoy). As a result, the merchandise trade balance improved, recording a USD 5.3 billion surplus in October (October 2019: USD 4.2 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 39.6 billion surplus in October, compared to the USD 38.5 billion surplus in September.
Commenting on the outlook ahead, Julia Goh and Loke Siew Ting, economists at UOB, see growth on the back of firming export demand:
“The silver lining is that we project Malaysia’s economy to recover in 2021 with improving external demand as a key driver of growth. […] We expect exports to rise 4.0% in 2021. China has shown a faster-than-expected recovery, with its effective pandemic containment and reopening of its economy in Apr. As such, a sharp cyclical rebound in China’s economic growth, alongside moderate recoveries across Asia and other developed countries, will help support the projected recovery in global demand next year.”