RHB sees smaller current account surplus after June trade data

RHB sees smaller current account surplus after June trade data
Business & Markets 2013
Written by Shalini Kumar of theedgemalaysia.com
Monday, 05 August 2013 17:35

KUALA LUMPUR (Aug 5): RHB Research Institute said the current account of the balance of payments for 2013 is projected to record a smaller surplus of RM20.5 billion, compared with RM57.3 billion in 2012.

Malaysia's exports have declined for the fifth month in a row to 6.9% year-on-year (y-o-y) in June, compared with -5.1% in May and -3.3% in April.

The drop was due to a pull back in global demand, on the back of a recession in the Eurozone and a modest US economic growth, while growth of the Chinese economy softened.

"The bigger decline in exports was reflected in a drop in the exports of non-electronic & electrical (E&E) goods and a bigger decline in the shipments of electronic & electrical (E&E) products, but were mitigated by a smaller decline in the exports of commodity during the month," said the research house.

In terms of markets, the widening decline in exports was attributed to a sharp drop in shipments to China and a bigger decline in exports to the US.

Total imports, however, reversed into a gain of 1.3% y-o-y in June, after dropping by 2.3% in May and compared with +9% in April.

"This was largely due to a rebound in the imports of intermediate inputs and a smaller decline in the imports of capital goods, but were offset partially by a slower increase in the imports of consumer goods," said RHB.

"The trade surplus widened to RM4.3 billion in June, from a surplus of RM2.9 billion in May and compared with a RM1 billion in April, its lowest level since November 1997," it added.