Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group assess the larger-than-expected drop in Malaysian exports in July.
Key Takeaways
Gross exports maintained a double-digit contraction of 13.1% y/y in Jul (Jun: 14.1%), steeper than our estimate (-10.5%) and Bloomberg consensus (-11.1%). Imports also kept a double-digit decline at 15.9% (UOB est: -18.5% vs Bloomberg est: -15.4%, Jun: -18.7%). This resulted in a smaller trade surplus of MYR17.1bn (Jun: +MYR25.8bn).
Jul’s export decline was brought by a broad-based weakness across all three export sectors for a second consecutive month. Within the manufacturing sector, shipments of commodity-based products (i.e. refined petroleum, chemicals & chemical products, and manufactures of metal) dropped the most during the month as a consequence of subdued global demand and lower commodity prices. A persistent fall in shipments to key export destinations that included the EU, Japan, Hong Kong, India and ASEAN region fully offset the effects of a positive growth rebound in exports to the US and China.
Meanwhile, there are no signs of trade rebounding as yet given risks ranging from softening global growth momentum, increasing trade restrictions to climate shocks. China’s sagging economy further poses perils for countries around the globe while the possibility of a slightly more restrictive policy path in the developed markets would further tighten global financial and credit conditions that will subsequently weigh on global trade. This coupled with unfavourable base effects continue to reinforce our 2023 full-year export outlook at -7.0% (BNM est: +1.5%, 2022: +24.9%).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD looks weak, challenges the 1.1700 support
EUR/USD faces a slight selling pressure, putting the 1.1700 support to the test on Thursday. The unexpectedly positive weekly readings from the US labour market data bolsters the USD and puts the risk complex under extra pressure, as market participants seek clarity regarding EU-US trade relations.
Crypto market sees $500 million in liquidation as Bitcoin hit record highs amid dovish Fed minutes
Bitcoin reached a new all-time high of $111,999 on Wednesday amid dovish Fed minutes, fueling wider market optimism. CoinGlass data shows that over $500 million in leveraged positions were liquidated across crypto markets in the past 24 hours.
GBP/USD flirts wih weekly lows near 1.3550
GBP/USD remains under scrutiny, declining toward the mid-1.3500s after a brief recovery attempt earlier in the day. The cautious approach in the market, coupled with positive US data, enables the Greenback to maintain its position, preventing Cable from gaining momentum as attention shifts to developments regarding US tariffs.
Gold holds above $3,300 but struggles to attract buyers
Gold holds above $3,300 on Thursday but struggles to build on Wednesday's gains. The benchmark 10-year US Treasury bond yield stabilizes near 4.35% following the previous day's sharp decline, making it difficult for XAU/USD to push higher.
New US tariffs target Asia, but some countries stand to gain
President Trump’s new tariffs are higher than expected for most Asian economies. Moreover, most countries will face additional tariff rates on transshipments. The new announcements are silent on Singapore, India and the Philippines, which might stand to benefit from tariff concessions if negotiations progress favourably.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.