Malaysia: Export growth remains healthy – UOB

UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting review the recent performance of the Exports sector in Malaysia.

Key Takeaways

“Exports maintained a double-digit expansion at 27.2% y/y in Jun (May: +47.0%) even as the country re-entered a full lockdown (FMCO) for the entire month with only essential sectors allowed to operate at 60% capacity. The reading came in well above our estimate (+2.5%) and Bloomberg consensus (+11.0%). Similarly, imports also held up a double-digit growth of 32.1% y/y (May: +48.4%). This brought the trade surplus up to MYR22.2bn (from +MYR13.8bn in May).”

“All three export sectors continued to pencil in a double-digit annual improvement last month, with almost all products witnessing positive growth, except for machinery, equipment & parts… Demand from all top trading partners such as G3, China, India, and ASEAN countries remained strong during the month.”

“June’s export performance wasn’t hindered by the FMCO as severely as we had expected. Yet, a substantial m/m increase in last month’s export value (by +MYR13.2bn) was made against a sizeable m/m decline in May (by -MYR13.3bn). The fourth month of strong y/y gain in imports of intermediate goods suggests a resilient trade recovery that has begun in Jun 2020… This alongside rising vaccination rates, expectations of further relaxation of containment measures by 3Q21, and a firmer global economic rebound will further provide impetus to Malaysia’s export recovery ahead.”