By NUR HAZIQAH A MALEK / Pic By BLOOMBERG
The country’s export growth saw an increase of 9.4% year-on-year (YoY) in July 2018 compared to the previous month’s 7.9% following the spike in the electronics and electrical (E&E), crude petroleum and natural rubber’s exports.
The exports level could have been higher, if not for the unfavourable base effect tailing the increased growth levels last year, which was reported to be at 31.1%, according to Public Investment Bank Bhd’s July 2018 trade held yesterday.
Public Investment Bank economic analyst Dr Rosnani Rasul said products that lifted July’s exports were led by crude petroleum which gained 90.1%, E&E which rose 23.6%, natural rubber by 3.3%, followed by timber and timber-based exports, which gained 0.4%.
“Declines were recorded for liquefied natural gas which went down as much as 38.4%, palm oil and palm oil-based exports by 13.6%, as well as refined petroleum which saw a 12.3% dip,” she said.
Rosnani said the deceleration in resource-based exports’ momentum remains a downside risk to the country’s export numbers, which has, thus far, contracted six out of seven months.
Although the month’s trade value managed to record the highest yield at RM163 billion, Malaysia emerged almost at the bottom of the month’s export race after trailing Indonesia at 19.3%, Vietnam at 14.5%, China at 12.2% and Singapore at 11.8%.
The nation was reported to be only ahead of Thailand, which recorded an 8.2% export growth level.
Rosnani said despite the weakening global trade outlook, exports are expected to be the nation’s growth lever for this year.
“With a double-digit growth in trade surplus so far for the year-to-date at 29.7% and no sign of stress from the ongoing trade tiff between the US and China, we see demand for our goods remaining stable.
“We are cautiously optimistic that exports will remain robust until year-end, more so when the ringgit’s recent depreciation makes Malaysian goods an attractive proposition,” she said.
RHB Investment Bank Bhd economist Vincent Loo Yeong Hong said the growth momentum has weakened and the trend is expected to continue into the second half of the year.
“We maintain our forecast for gross exports to grow at 6.5%, albeit slowing from the 18.9% recorded last year amid a slightly weaker global trade outlook and a slowdown in demand from China for the country’s exports,” he said.
Loo said the improvement during the month was mainly due to shipments to China and the US.
“A moderation in shipments to the European Union and Asean, as well as a further drop in shipments to Japan have offset part of the gains,” he said.
Bernama reported yesterday that the ringgit has declined to RM4.1460 on Wednesday’s close on the back of external anomalies, such as South Africa’s falling into recession, and the policy rate of Argentina’s central bank has raised to 60% the previous week.