Malaysia: Exports surpassed estimates in August – UOB

Senior Economist at UOB Group Julia Goh and Economist Loke Siew Ting review the latest performance of the exports sector in the Malaysian economy.

Key Takeaways

“Gross exports expanded at a faster pace by 18.4% y/y in Aug (Jul: +5.0%), beating our estimate (+9.8%) and Bloomberg consensus (+14.6%). Gradual relaxation of containment measures for some states during the month and year-ago low base effects bolstered the export growth last month. On the other hand, gross import growth slowed to 12.5% y/y (UOB estimate: +20.8%; Bloomberg consensus: +24.5%; Jul: +23.9%), marking the smallest gain in seven months. This resulted in a larger trade surplus of MYR21.4bn (Jul: +MYR13.8bn).” 

“The near-term export growth momentum remains intact. A sustained improvement in global demand and a persistent rise albeit moderate in imports of intermediate goods implies continued export orders ahead. Strong demand from the West for year-end festivities is expected to create seasonal volume rushes over the next few months. In addition, Malaysia is on track to fully inoculate 100% of adult population by end-Oct and enter an endemic stage that will bring more manufacturing capacity coming back online to meet export orders. Thus, we maintain our 2021 full-year export growth forecast at 22.0% (2020: -1.1%).”