Published September 8, 2009

July exports bode well for Malaysian economy

Private economists say economic growth numbers may be revised up

By S JAYASANKARAN
IN KUALA LUMPUR

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MALAYSIA'S newest export figures may indicate that the economy is turning around.

Uplifting: Boxes of palm cooking oil are stacked at a warehouse in Ipoh, Perak, Malaysian exports to all its main trading partners increased month-on-month

Its exports expanded to reach RM48.87 billion (S$20.29 billion) in July, the highest monthly export value achieved in the year so far.

Preliminary figures released by the Ministry of International Trade and Industry (MITI) yesterday showed that the July export numbers were up 8.4 per cent on a month-to-month basis. Similarly, imports clocked in at RM41 billion, an increase of 14 per cent from June.

It seems that the economy is emerging from its export trough in February. Even so, it would be too soon to pop the champagne. On a year-to-year basis, exports declined by 23 per cent while imports slowed by 14 per cent.

Overall, however, the trade balance continued to be in the black with a surplus of RM7.81 billion, which made July the 141st consecutive month of surplus since November 1997. For the first seven months of the year, the surplus totalled RM67.05 billion.

Private economists have said that the 2009 economic growth numbers could be revised upwards to zero from negative growth as previously forecast by the government because of greater-than-expected recovery in the fourth quarter. Even so, it will take its time in coming. The import figures for July were 16 per cent down from a year ago, largely led by declines in the imports of intermediate goods - a key input into the fashioning of manufactured items for export.

Still, that a gradual shift was occurring could not be denied altogether. MITI revealed that manufactured exports increased 11 per cent month-on-month in July, The gains were driven by increases in the exports of electric and electronic items (42 per cent of all exports), chemicals, metal products, optical and scientific equipment.

On a month-to-month comparison, Malaysian exports to all its main trading partners increased: the Asean region (6 per cent), China (14 per cent), the United States (10 per cent) and the European Union (10 per cent).

But the economic malaise that first started in the West and spread globally clearly continues to plague most countries as year-on-year comparisons show a different story.

In that regard, the July export numbers to all destinations continue to be down, led by the United States (29 per cent), the European Union (24 per cent), Asean (20 per cent) and China (17 per cent).

Japan was the only country where Malaysian exports actually contracted in July on a month-to-month basis (minus 4.5 per cent). On a yearly basis, the figures were much worse (minus 34 per cent).