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UOB Group’s Senior Economist Julia Goh and Economist Loke Siew Ting reviewed the latest Malaysian trade balance figures.

Key Quotes

“Exports rose marginally by 0.2% y/y in Oct (Sep: +13.6%), which was better than our estimate and market consensus of -0.4%. Imports fell 6.0% y/y (Sep: -3.6%). The trade surplus widened to MYR22.1bn in Oct (Sep: +MYR21.9bn).”

“Overall exports were lifted by higher manufactured exports (+2.5% y/y), thanks to higher shipments of rubber products, electrical and electronics, machinery, equipment and parts, as well as iron and steel products. Agriculture exports surged (+28.7% y/y) owing to higher exports of palm oil and related products. Meanwhile, exports of mining goods fell 47.2% y/y following lower exports of LNG, crude petroleum, and petroleum products.”

“Malaysia’s economy is projected to recover in 2021 with improving external demand as a key driver of growth. The year-to-date export contraction of -3.3% in Jan-Oct affirms our 2020 fullyear export projection of -3.5%. We expect exports to rise 4.0% in 2021, supported by a projected recovery in global demand.”