Malaysia: Exports slump in September
November 4, 2019
Exports slumped 7.3% year-on-year in September, even more sharply than August’s 2.9% decrease and missing market analysts’ expectations of a smaller contraction. September’s reading came on the back of weak demand for electronics and fuels. Exports to China, one of Malaysia’s largest trading partners, fell 3.0% year-on-year in local currency terms, likely reflecting the ongoing effect that U.S.-China trade tensions are having on external demand.
Imports, meanwhile, rose 1.7% year-on-year on higher inflows of intermediate, consumption and capital goods. This contrasted August’s 14.4% decline and beat market expectations.
Consequently, the trade surplus fell to USD 2.0 billion in September from USD 3.8 billion in September 2018, while the 12-month moving sum of the trade surplus in September fell to USD 33.1 billion from USD 34.9 billion a month prior.
Looking forward, research analysts at Nomura see a further deterioration ahead, commenting:
“We expect further export weakness owing to cooling foreign demand and the deepening tech downcycle. Because of Malaysia’s exposure to trade, negative spill-over effects on domestic demand from the weakening export sector (?as is already evident in plunging car sales in Q3 and subdued credit growth) are likely to continue.”
Author: Stephen Vogado, Economist