KUALA LUMPUR, Sept 29 ―Malaysia’s trade performance picked up in August, supported by strong external demand for semiconductor chips as well as rising oil prices, said Moody’s Analytics.
The country’s trade surplus widened to RM21.4 billion in August from July’s RM13.7 billion.
This was driven by a pickup in exports, which rose 18.4 per cent year-on-year (y-o-y), while imports were up 12.5 per cent y-o-y.
“Export growth will continue to fuel Malaysia’s economic recovery into 2022, although the risk of supply-chain disruptions from Covid-19-induced lockdowns still clouds the outlook.
“We still expect the heightened demand for manufactured goods and the lift from commodity sales to prop up Malaysian exports in coming months,” Moody’s Analytics said in a research note today.
Meanwhile, AmBank Research viewed that the faster y-o-y exports growth in August, which beat the market consensus of 14.6 per cent, reflected the sustained healthy external demand conditions amid low base effects.
It said the positive exports growth was seen across all three major sectors with commodity exports taking the lead.
Mining exports soared by 50.6 per cent y-o-y in August supported by strong demand for natural gas, which jumped 110.2 per cent y-o-y, while agriculture exports also reported a strong double-digit growth of 28.5 per cent y-o-y in August, largely driven by palm oil exports, which climbed 41.5 per cent y-o-y.
However, the research house opined that the external demand outlook was cloudy due to ongoing concerns on prolonged supply-chain disruptions, shortages of inputs, and higher energy price.
In addition, moderating growth momentum in the United States (US) and China added to concerns on the strength of global demand, AmBank Research said.
Public Investment Bank Bhd (PIVB), meanwhile, said Malaysia’s strong exports was consistent with regional trend which benefitted from several drivers such as full economic openings in Asean and advanced economies, massive global Covid-19 fiscal spending and the surge in global commodity prices especially mining and agriculture.
According to PIVB, Asean exports are expected to remain steady in the fourth quarter to be driven by a revival in global demand and global pandemic condition that will push demand for electrical and electronic products, petroleum-related goods, and palm oil and palm oil-based products.
“Malaysia’s export momentum will remain driven by manufacturing and natural resources thanks to full economic openings in key regions especially in advanced economies (US, eurozone), Japan and China, our largest trade partners by value,” it said.
On the outlook it said the bright prospect may be tempered, however, by resurgence in global Covid-19 infections following the emergence of powerful variants Delta and Lambda which could lead to targeted lockdown measures and, therefore, potential disruptions in supply and demand conditions.
“The impending start of US-China second trade talk is also a concern as that could hurt demand for manufacturing goods given the uncertainty over tariff and non-tariff measures, one of the major concerns for 2022.
“The likely rebound in imports, on the other hand, could weigh on trade surplus given the expected turnaround in capital and intermediates goods imports,” it added. ― Bernama
