KUALA LUMPUR: Malaysia posted surprising growth in exports in March, raising the prospect of an improved economic outlook in coming months that could alleviate pressure on the fragile ringgit.
Malaysia’s exports in March rose 2.3% from a year earlier, confounding expectations for a third month of decline, as demand for electronics products boosted exports to its key markets China and the United States.
The central bank has said that the more diversified economy would bolster growth even as oil prices remain low, which have hurt the reserves of the oil-exporting country.
“This supports the signals from Bank Negara that the economy is resilient and there's no real reason for them to ease monetary policy,” said economist Euben Paracuelles at Nomura.
Imports rose better-than-expected 5.8% from a year earlier due to more intermediate goods brought in before the implementation of a 6% consumer tax on April 1.
A Reuters poll had forecast exports would drop 3.9%, while imports were expected to rise 1%.
“Malaysia’s product mix is catered to the improvement in the United States,” said Paracuelles, adding that Nomura had underestimated the growth of electronics exports.
The trade surplus for the month widened to RM7.82bil from RM4.5bil in February.
Exports of commodities remained weak as palm oil, crude oil and petroleum products saw sharp declines due to lower global prices.
But commodities exports should improve as global prices stabilise, according to analysts.
After 10 consecutive months of decline, exports to China in March rose 6.6% due to strength in electrical and electronic product shipments.
However, overall exports to China in the first quarter fell 12.6%, due to a weak performance in the first two months of 2015.
Malaysia's first quarter exports declined 2.5% from a year earlier, while imports rose a mere 0.2%.
The ringgit, emerging Asia’s second-worst performing currency so far this year, cut losses on the strong export data before turning weaker. – Reuters