Malaysia June trade surplus strong, but imports slow
UPDATED @ 03:07:16 PM 08-08-2012
KUALA LUMPUR, Aug 8 — Malaysia achieved its biggest trade surplus in three months in June, buoyed by energy exports, but a drop in imports of intermediate goods could mean the country's trade-reliant economy may be starting to feel the pinch from global economic slowing.
The Southeast Asian country on Wednesday reported a surplus of 9.2 billion ringgit for June, double May's 4.6 billion ringgit and above the 7.9 billion ringgit of a year earlier. It was the biggest surplus since March's 10.5 billion ringgit.
The June surplus was above the median forecast of 5.2 billion ringgit by 17 analysts polled by Reuters. Exports were up 5.4 per cent, above the median forecast of 3.3 per cent while imports rose 3.6 per cent, compared with an 8.6 per cent forecast.
In May, exports rose 6.7 per cent from a year earlier, while imports had jumped 16.2 per cent on year.
Exports of electronic products, which are one-third of Malaysia's total, rose 2.1 per cent in June on year, while exports of liquefied natural gas rose 25.6 per cent.
In June, imports of intermediate goods -- used to make other products, usually to be exported — fell 5.3 per cent, in a indication global slowing may be starting to affect Malaysia's industrial output. On Thursday, Malaysia will report industrial output data for June.
Azrul Azwar Ahmad Tajudin, chief economist of Bank Islam, said he is concerned the import numbers "could imply slower momentum in domestic demand. The 5.3 per cent decline in intermediate goods could translate into sluggish industrial production for the next few months."
With falling commodity prices -- earnings from palm oil in June were 14 per cent below a year earlier -- Azrul said Malaysia "is losing an important cushion to face sluggish global demand for manufactured goods."
June's 5.4 per cent rise for exports showed how Malaysia depends on strong Asian demand for liquefied natural gas and petroleum products to shore up sluggish growth in electronic shipments. A drop in exports of electrical and electronic items to the EU were offset by rises for China, the United States and Japan.
In June, Malaysia's exports to China were up 13.2 per cent from a year earlier while they rose 4.9 per cent to the U.S. Exports to the European Union were down 8.4 per cent.
Malaysia's economy grew at an annual pace of 4.7 per cent in the first quarter of 2012, slowing from the previous three months as firm domestic demand helped offset an export drop. — Reuters