Exports up 21% to RM451b in 1H17

Export products across key segments expanded at an average of 22%

By ALIFAH ZAINUDDIN / Pic By AFIF ABD HALIM

Malaysian exports grew 21% year-on-year (YoY) to RM451.1 billion for the first- half of 2017 (1H17), as export products across key segments expanded at an average of 22%.

Second International Trade and Industry Minister Datuk Seri Ong Ka Chuan said he was convinced that the exceptional exports performance in 1H17 will see Malaysia achieve a gross domestic product (GDP) growth of at least 5.5% in the second-quarter this year (2Q17).

“I think we can easily achieve at least 5.5% in the 2Q [due to higher trade in 1H17]. Usually, the 1H performance is better than the second but right now, the 1H is doing very well,” Ong told reporters on the sidelines of a productivity enhancement showcase by the National Oversight Productivity Council (NOPC) in Kuala Lumpur yesterday.

Electrical and electronics (E&E) products, which represented 35.8% of total exports, increased by 20.5% to RM161.6 billion against RM128.5 billion last year. Exports of petroleum products rose 40% to RM36 billion, while chemicals and chemical products, as well as palm oil and palm oil-based agriculture products were up by 19.1% and 27.7% to RM33.4 billion and RM26.7 billion respectively.

Asean remained as Malaysia’s largest export destination with RM131.9 billion worth of exports, followed by China (RM59.8 billion), the European Union (RM46.4 billion), the US (RM43.3 billion) and Japan (RM37.7 billion), data from the International Trade and Industry Ministry showed.

Total trade stood at RM859.2 billion, 22% higher versus the same period last year, while imports improved 23.3% to RM408.1 billion with import products in the E&E, chemicals and chemical, machinery, petroleum and transport equipment segments posting an average growth of 25%.

Several economists projected the 2Q GDP to hover above 5%, amid improved external demand and stronger performance from the services sector.

AllianceDBS Research raised its forecast to 5.5% from 5.2%, while Standard Chartered Research expected Malaysia to register a 5.4% growth in the 2Q.

Sunway University Business School economics professor Dr Yeah Kim Leng also anticipated the quarterly growth figure to fall between 5% and 5.5%.

AllianceDBS Research chief economist Manokaran Mottain said improved external demand contributed to a 9.8% rise in manufacturing activity, as production grew at a faster than anticipated rate of 6.2% in 2Q17, led by the E&E subsector.

He said the strong trend seen in manufacturing production reflected the exports data seen during the quarter, which expanded 20.6% in the 2Q, as imports grew 19.1%.

“The rising imports trend suggests that future exports will still be stronger in the coming months. We continue to maintain inflation forecast of 3.5% for 2017 and expect the Overnight Policy Rate to be kept steady at 3% throughout the year,” Manokaran said.

On a separate note, the government aims to enhance productivity growth to 3.7% this year. Between 2015 and 2Q17, Putrajaya has allotted nearly RM200 million to raise the productivity levels of 1,057 companies under NOPC’s four models.

The move has since seen Malaysia’s productivity grow by 3.5% to RM78,218 in 2016 from RM75,548 previously. However, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said a clearer measure is needed to gauge the impact of government investments on elevating productivity.