Malaysia: Export growth momentum eased in May – UOB

Pablo Piovano FXStreet

Julia Goh, Senior Economist at UOB Group, and Economist Loke Siew Ting, assess the latest trade data in the Malaysian economy.

Key Quotes

“Export growth decelerated by a faster than expected pace to 47.3% y/y in May (Apr: +63.0% y/y), reflecting the impact of reintroduction of Movement Control Order (MCO 3.0) from 12 May. The reading was well below our estimate (+60.0%) and Bloomberg consensus (+57.5%). Conversely, imports posted the largest annual gain since Feb 1998 at 50.3% (Apr: +24.6% y/y), partly due to year-ago low base effects. This brought the trade surplus down further to a 9-month low of MYR13.7bn (from +MYR20.4bn in Apr).”

“Slower shipments of manufactured (especially E&E, refined petroleum and rubber products) and agriculture goods were the main reasons behind the smaller gains in May’s overall exports, while overseas sales of mining products improved further on a persistent recovery in demand for Malaysia’s crude oil and LNG.”

“We expect the pace of the trade recovery in Jun-Jul to be hindered by the current lockdown measures given that only essential export sectors are allowed to operate at 60% capacity. Barring any delays in vaccine supply, the acceleration of the national vaccination program and plans to raise the operating capacity under the four-phase National Recovery Plan (NRP) are set to bring the trade recovery back on track by end-3Q21.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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