Malaysia: Exports slide in USD terms in August amid trade war tensions
According to Statistics Malaysia, the country saw an increase in the trade surplus of 655% from the same month last year, when measured in the local currency terms (ringgits, MYR). The trade surplus increased to MYR 10.9 billion in August from MYR 1.4 billion in August 2018 (in USD terms, 2.6 billion, up from 0.4 billion).
However, the reading from August 2018 was somewhat of an outlier, with that month having seen a deep contraction in the trade surplus due to a large spike in imports. As such, the stellar year-on-year increase somewhat belied the deepening concern that U.S.-China trade tensions are having a negative effect on Malaysia’s economy; in month-on-month terms, the trade surplus fell 23.5% in MYR terms (25.0% in USD terms).
Exports denominated in ringgits decreased 0.8% year-on-year in August (down 2.9% in USD terms), partially reversing July’s 1.7% increase but drastically missing market analysts’ expectations of a 2.7% expansion. August’s reversal came on the back of reducing electronics and fossil fuel exports. Imports, meanwhile, dropped 12.5% year-on-year in ringgit terms (14.4% in USD terms) on lower imports of intermediate, consumption and capital goods (July: -6.0% yoy), sliding further than the 8.0% drop expected by market analysts.