Q3 export growth strongest in seven years

KUALA LUMPUR: Malaysia's export growth in the third quarter of 2017 was the strongest in seven years, said RHB Investment Research.

On a quarterly basis, exports grew by a quicker pace of 22.1% y-o-y in Q3, its strongest since Q1 2010, indicating that export will continue to contribute positively to GP growth in the quarter. 

Exports retained a healthy pace of 14.8% y-o-y growth in September, despite slowing from 21.6% in the previous month amid a waning low-base effect, it said.

None electrical & electronic (E&E) as well as E&E exports saw a broad-based slowdown during the month.

Manufactured exports grew at a slower pace of 17.1% in September from 22.4% in August. The deceleration was owing to a broad-based slowdown in shipments to the US, EU, Japan and Asean. 
Shipments to China gained pace in September and breached the RM11bil mark for the second consecutive month, reaching a record high.

Import growth, however, eased to 15.2% y-o-y in September from 22.4% in the previous month. There was a slowdown in imports of intermediate, capital and consmer goods.

For the month of September, the trade surplus narrowed to RM8.6bil from RM10bil in the previous month. FOr the January to September period, the trade surpluse grew to RM69.6bil from RM60.2bil in the previous corresponding period.

"Moving forward, given the fading base-effect, we expect export growth to be sustained at 6.5% in 2018, albeit slowing from an estimated 15.2% this year."

For 2018, the research firm expects the current account surplus to widen slightly to RM30.3bil or 2.1% of GDP owing to a larger merchandise trade surplus from more moderate import growth than export growth.

"The pick-up in economic growth, however, would result in a higher deficit in the services and income accounts to offset part of the gain," it added.