Malaysia: Exports post a softer contraction in May in USD terms, but rise in local currency terms
July 4, 2019
Exports dipped 2.9% year-on-year in May in USD terms, improving from the 4.6% decline in April. However, in ringgit terms, exports increased 2.5% year-on-year, beating market expectations and supported by greater palm oil and timber exports.
Imports, meanwhile, dropped 3.9% in May in USD terms, compared to April’s 1.4% slip. In ringgit terms, imports grew 1.4%, thanks to greater intermediate and consumption goods imports.
Consequently, the trade surplus narrowed to USD 2.2 billion in May from 2.6 billion in April, but widened compared to the USD 2.1 billion surplus recorded in May 2018. The 12-month moving sum of the trade surplus in May, meanwhile, ticked up marginally to USD 29.8 billion from USD 29.7 billion a month earlier.
According to Prakash Sakpal, an economist at ING: “Electronics and electrical exports […] remained a key growth driver […] [representing] a significant outperformance in the face of the ongoing electronics export weakness observed elsewhere in the region reflecting the global tech slump. This is also in stark contrast with Singapore, which is leading the global tech slump with a negative electronics export trend since end-2017”.
Author: Steven Burke, Economist