Malaysia: Exports keep the upbeat momentum – UOB

Pablo Piovano FXStreet

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the latest trade balance figures in the Malaysian economy.

Key Quotes

“Exports staged a strong growth rebound to 13.6% y/y in Sep (Aug: -2.9% y/y), beating our estimate… for a 2.0% y/y gain. Accounting for Sep’s trade data, overall exports rose 4.4% y/y (2Q20: -15.1% y/y) while imports fell -6.3% y/y (2Q20: -15.1% y/y) in 3Q20. This brings the trade surplus to a record high of MYR60.4bn in 3Q20 (2Q20: +MYR27.6bn), which should translate into a higher estimated current account surplus of MYR30.5bn in 3Q20 (2Q20: +MYR7.6bn).”

“Sep’s export growth marked the best performance since Oct 2018, largely on the back of robust demand from China, Hong Kong, EU, US, and ASEAN region for Malaysian exports particularly E&E, palm oil, and rubber products. Low base effects from last year also helped to lift growth.”

“A mixed bag of leading indicators amid a resurgence of COVID-19 infections suggests a bumpy export outlook for Malaysia. The year-to-date export contraction of 3.7% in Jan-Sep affirms our 2020 full-year export projection of -3.5%, partly aided by low base effects. We expect exports to rise 4.0% in 2021, supported by a projected recovery in global demand.”

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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