Published September 11, 2008

M'sia's July exports surge 25% to RM63b

Electrical, electronic sector boosts sales with 12% jump

By PAULINE NG
IN KUALA LUMPUR
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MALAYSIA'S exports amounted to RM63.4 billion (S$26.24 billion) in July, a robust 25.4 per cent year-on-year expansion achieved mainly on the back of an unexpectedly strong performance by electrical and electronic (E&E) products.

Continuing on its fine run in recent months, the E&E sector posted a 12 per cent, or RM2.6 billion, rise to RM24.5 billion in July.

Import growth for the month climbed to nearly 15 per cent, resulting in a trade surplus of RM14.5 billion for July, the statistics department said yesterday. This was almost 82 per cent higher than in July 2007.

Economists, however, caution a looming global economic slowdown and falling commodity prices would likely lead to slimmer trade surpluses in coming months.

Exports of commodities and resource-based products had not varied by much in July, but the E&E segment - the country's largest export revenue earner valued at RM24.5 billion or 38.7 per cent of total exports - had provided the 'extra push'.

'I least expected such strength in E&E since it quite closely tracks Singapore's and that hasn't been doing so well, so I am surprised,' said CIMB chief economist Lee Heng Guie.

'But it remains to be seen if the uptrend continues,' he said in reference to indicators which show the economy to be slowing in the United States where Malaysia exports the bulk of its E&E components.



Because of that as well as the downtrend in commodity prices, full-year export growth is expected at 10-11 per cent, with import growth around 7-8 per cent.

Mr Lee expects export growth in the second half to be 'thin single digit', and to decelerate to 2-3 per cent next year - similar to in 2007.

Aseambankers Research pegs 2009 export growth at 5 per cent and import expansion at 7.5 per cent. It expects Malaysia's trade surplus to hit RM126 billion this year and to fall to RM118.8 billion in 2009.

As a small oil producer but one of the largest crude palm oil exporters, Malaysia's export revenues have been buoyed by record-high prices this year, but prices are easing.

Malaysia's top 10 trading partners - Singapore, the US, Japan, China, Thailand, Korea, Indonesia, Hong Kong, Taiwan and Germany - accounted for slightly over 70 per cent of the country's total trade in the first seven months.