Malaysia: Exports rebound unexpectedly in August

Exports in USD terms rose 3.3% annually in August, which was a sharp improvement over July’s 8.9% contraction (previously reported: -8.7% year-on-year). The rise, which was the first after 22 consecutive months of contraction, was unexpected by market analysts. The expansion was supported by higher exports to key trade partners such as Singapore and the EU. According to the National Statistical Institute, the unexpected rise mainly reflected increases in exports of electronic products and of palm oil, which accounts for around 12% of all Malaysian exports. These improvements compensated dwindling earnings from shipments of liquefied natural gas. Imports also rebounded in August, rising 6.7%, which contrasted the 8.1% fall in July (previously reported: -8.2% year-on-year).

The trade balance widened from a USD 480 million surplus in July to a USD 2.1 billion surplus in August. Despite the better-than-expected result, the 12-month moving sum of the trade surplus edged down from USD 22.6 billion to USD 22.2 billion in August.

FocusEconomics Consensus Forecast panelists expect exports to fall 8.9% in USD terms in 2016. Imports are expected to decline 8.8% in 2016, pushing the trade surplus to USD 21.8 billion. For 2017, the panel expects exports to grow 4.1%. With imports expected to rise 3.7% in 2017, panelists see the trade surplus rising to USD 23.3 billion.