KUALA LUMPUR, Oct 29 — Malaysia’s trade surplus is expected to remain encouraging in the fourth quarter of 2021 (Q4 2021) after it expanded to RM26.1 billion in September.

CGS-CIMB Securities Sdn Bhd said the country’s trade performance had outperformed the firm and market’s expectations, bolstered by a synchronous rally in the commodity prices. 

"It was also attributed to the resumption in business operations in the country following the relaxation of movement restrictions as more states transitioned out of Phase 1 of the National Recovery Plan (NRP) during the month, which will remain well supportive of total trade in Q4 2021,” it said in a research note today.

The trade surplus widened to RM26.1 billion in September with exports reporting a solid gain of 16.0 per cent month-on-month (m-o-m) and 24.7 per cent year-on-year (y-o-y) to RM110.8 billion — both values setting new record highs. 

It said improving domestic demand raised imports by 14.2 per cent m-o-m and 26.5 per cent y-o-y to a five-month high of RM84.7 billion. 

"Improving domestic demand was reflected in higher imports of capital goods, consumption goods, as well as intermediate goods, reversing the m-o-m declines in August, reflecting nascent improvements in consumer and business sentiment and restocking activities prompted by higher domestic demand and trade activities. 

"We expect Malaysia’s gross domestic products (GDP) growth to improve from 3.9 per cent in 2021 to 5.6 per cent in 2022,” it said. 

Meanwhile, Public Investment Bank opined that Malaysia’s steady exports momentum is consistent with regional trends which benefitted from the full economic openings in Asean and advanced economies (AEs), expansionary global Covid-19 fiscal spending, and surge in global commodity prices especially mining and agriculture. 

The rise in Asean exports for September was led by Indonesia, Malaysia, Thailand, and Singapore, leaving Vietnam as the only drag to regional exports. 

"Asean exports are projected to remain steady in the immediate term to be driven by full economic openings in most regions as the Covid-19 situation improves.

"This will also be pushed by expansionary global fiscal and monetary strategies that are likely to remain in place until the first half of 2022. All these will underpin global demand for manufacturing and natural resources, a boon for major global producers like Asean.

"The volatility of the ringgit and therefore, the external devaluation of the currency given the tapering move in AEs is another driver of exports,” it said. — Bernama