Export growth accelerated strongly in September to 8.0% year-on-year in USD value terms, up from August’s moderate 4.4% increase. The pickup came on the back of increased demand for electrical and electronic products and refined petroleum products. This offset a double-digit contraction in exports of palm oil and palm oil-based products. In ringgit terms, exports expanded 6.7% in September, slightly above market expectations and contrasting the 0.3% drop in the previous month.
Imports contracted 1.5% year-on-year in September in USD terms, markedly contrasting the 16.4% expansion in August and reflecting a broad-based drop in demand, as all three main subcomponents recorded contractions. Capital goods imports dropped at the sharpest rate, followed by a double-digit fall in consumption goods imports. In ringgit terms, imports contracted 2.7% over a year ago (August: +11.2% yoy).
As a result, the trade surplus widened notably from USD 393 million in August to USD 3.7 billion in September. This was also noticeably above the trade surplus recorded in the same month a year earlier (September 2017: USD 2.0 billion) and marked the biggest trade surplus since March 2018. The 12-month moving sum of the trade surplus increased from USD 26.4 billion in August to USD 28.1 billion in September.
Malaysia Trade Balance Forecast
FocusEconomics Consensus Forecast panelists expect exports and imports to grow 3.8% and 4.0% respectively in 2019, with the trade surplus reaching USD 28.5 billion. In 2020, they see export and import growth at 5.7% and 7.0% respectively, with the trade surplus narrowing to USD 27.3 billion.