Malaysia's trade surplus increased sharply to MYR 14.3 billion in July of 2019 from MYR 8.3 billion in the same month of the prior year and easily beating market expectations of a MYR 10.7 billion surplus. This was the largest trade surplus since March, as exports rose while imports fell.
Year-on-year, exports unexpectedly increased by 1.7 percent year-on-year to MYR 88.0 billion in July 2019, missing market consensus of a 2.5 percent drop and after a 3.1 percent fall in the previous month. Sales rose for: electrical & electronic products (4.5 percent); timber & timber based products (1.2 percent); liquefied natural gas/LNG (31.3 percent); refined petroleum products (3.2 percent); natural rubber (25.5 percent). Conversely, outbound shipments declined for: crude petroleum (-45.7 percent); palm oil & palm oil-based products (-9.9 percent).
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Among major trading partners, sales increased to China (3.8 percent), led by LNG and refined petroleum product; Singapore (3.1 percent), driven by electrical and electronic products; and the US (7.9 percent).
Imports declined by 5.9 percent year-on-year to MYR 73.7 billion in July 2019, better than market expectations of a 7 percent drop and compared to a 9.2 percent fall in the previous month. This marked the second straight month yearly drop in inbound shipments, as purchases shrank for all categories. Imports of capital goods tumbled 13.9 percent, due to decline in both capital goods except transport equipment (-6.3%) and transport equipment, industrial (-58.8%). Also, purchases of intermediate goods decreased by 3.4 percent, mainly attributed to industrial supplies, processed (-8.9%) and parts and accessories of capital goods (-19.6%). In addition, imports of consumption goods contracted 5.0 percent, driven by semi-durables (-18.9%) and durables (-17.9%).
By country, purchases dropped from the EU countries (-10.0 percent), the ASEAN countries (-10.7 percent). Meanwhile, imports from China fell by 2.8 percent, mainly due to electrical & electronic/E&E products. Also, imports from Singapore slumped 20.2 percent, led by E & E products.
Considering the first seven months of the year, the country's trade balance recorded a surplus of USD 81.5 billion, compared with a surplus of USD 68.8 billion in the same period 2018.
Malaysia’s total trade is projected to grow moderately by 5 percent in 2019 from 5.9 percent in 2018 due to uncertainties in the global market.