Malaysia: Exports surpassed estimates in August – UOB
Senior Economist at UOB Group Julia Goh and Economist Loke Siew Ting review the latest performance of the exports sector in the Malaysian economy.
“Gross exports expanded at a faster pace by 18.4% y/y in Aug (Jul: +5.0%), beating our estimate (+9.8%) and Bloomberg consensus (+14.6%). Gradual relaxation of containment measures for some states during the month and year-ago low base effects bolstered the export growth last month. On the other hand, gross import growth slowed to 12.5% y/y (UOB estimate: +20.8%; Bloomberg consensus: +24.5%; Jul: +23.9%), marking the smallest gain in seven months. This resulted in a larger trade surplus of MYR21.4bn (Jul: +MYR13.8bn).”
“The near-term export growth momentum remains intact. A sustained improvement in global demand and a persistent rise albeit moderate in imports of intermediate goods implies continued export orders ahead. Strong demand from the West for year-end festivities is expected to create seasonal volume rushes over the next few months. In addition, Malaysia is on track to fully inoculate 100% of adult population by end-Oct and enter an endemic stage that will bring more manufacturing capacity coming back online to meet export orders. Thus, we maintain our 2021 full-year export growth forecast at 22.0% (2020: -1.1%).”