Source: The Sun Daily
MIDF Research has maintained its forecast for Malaysia’s export growth in 2016 at 3.9% but noted that unimproved global trade poses real downside revision.
“With global trade weakening in recent time and no real sign of improvement, our expectation for exports performance in 2016 of 3.9% year-on-year growth is negatively biased toward downward revision. Unless there is a significant growth in the next quarter, we could expect exports to contract this year,” MIDF said in a report last Friday.
Malaysia’s exports rose by 1.6% in April 2016 to RM61.3 billion from RM60.4 billion in the previous year.
Imports still declined but narrowed to only 2.3% at RM52.3 billion which led to a 31.9% increase in trade balance to RM9.1 billion.
MIDF said strong petroleum products trade buttressed April exports performance.
“Exports of petroleum products jumped by 34.4% year-on-year and 21.0% on month-on-month basis due to higher shipment to major destinations. In particular, shipments to Singapore rose tremendously, more than double on a year-on-year basis and up by 68.5% month-on-month,” it said.
In April, exports to eight countries were in decline, which included China. MIDF noted that exports to the second biggest economy in the world shrank further by 16.6%, the worst decline since February last year.
“Slump in palm oil and petroleum products exports were the main reason for the huge decline,” said MIDF, adding that it was in stark contrast with the trend observed in Singapore.
Exports to Asean partners were better with healthy improvement to Singapore, Philippines and Vietnam except to Indonesia and Thailand, which shrank by 10.1% and 12.4% respectively.
“Intra trade performance within Asean is improving which export to the regional peers contributed 30% of Malaysia’s total exports for the month,” it said.
MIDF noted that manufactured goods exports performance steadied while higher agriculture exports gave support to April performance. Imports of intermediate goods slipped further to 6.8% in April and 4.0% year-to-date.